Measuring financial health: What policymakers need to know

Measuring financial health: What policymakers need to know

May 19, 2020    

Financial health is a potentially powerful concept that is attracting interest around the world.

Citizens, politicians and policymakers know that effectively managing one’s financial resources – being financially healthy – is central to the success of both individuals and broad populations. If financial health is to be a useful construct, it is important to be clear about what it means, how it is measured, and how it can be applied. The report aims to determine whether financial health can serve as a useful measurement of consumer status or outcomes, as an addition to insight2impact’s existing financial needs framework.

This report provides an overview of financial health and the policy responses around the world. Based on this, and the key questions of whether financial health measure more than income and if financial inclusion supports financial health, the report offers recommendations to policy makers on strategies for measuring the financial health of their population.

The three measurement recommendations are:

  1. Including the resilience question in surveys
  2. Creating specific financial health indexes
  3. Making use of detailed surveys

Policymakers may wish to adopt one or more of three main strategies for measuring financial health, depending on their purpose and resources: use of the resilience question as a single proxy measure, development of an index of financial health, and detailed, comprehensive financial health surveys.

Download the report Size 3.43MB

The author of this note would like to thank Wicus Coetzee, Isabelle Carboni, Hennie Bester, Leonard Makuvaza, Paul Gubbins, Dave Kim and Matthew Soursourian for their valuable input, review and comments. Thanks also to all those willing to be interviewed for this report.


insight2impact (i2ifacility) was funded by Bill & Melinda Gates Foundation in partnership with Mastercard Foundation. The programme was established and driven by Cenfri and Finmark Trust.

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