13 branches per 100,000 adults (commercial banks), the percentage of firms with line of credit (all firms), and the percentage of firms with line of credit (small firms). When using these proxies, one needs to be mindful of their weaknesses. For example, the number of bank branches is becoming increasingly misleading with the move towards branchless banking. The number of bank accounts does not suffer from the same issue, but it has its own limitations (in particular, it focuses on banks only, and does not correct for the fact that some bank clients have numerous accounts).

Much of the data for the financial access dimension of the Global Financial Development Database came from the IMF‘s recently established Access to Finance database, which is based on earlier work by Beck, Demirgüç-Kunt and Martinez Peria (2007). A portion of the financial access data is from the newly constructed the _Global Financial Inclusion Indicators_ , or ―Global Findex‖ (Demirgüç-Kunt and Klapper 2012). The Global Findex is the first public database of indicators that consistently measures individuals‘ usage of financial products across countries and over time. It can be used to track the potential impact of global financial inclusion policies and facilitate a deeper and more nuanced understanding of how adults around the world save, borrow and make payments. It is based on detailed interviews with at least 1,000 people per country in some 150 countries about their financial behavior through the Gallup World Poll survey.

_Financial markets._ Data on access to financial markets are more scant. To approximate access to stock and bond markets, measures of market concentration are used, the idea being that a higher degree of concentration reflects greater difficulties for access for newer or smaller issuers. The variables in this category include the percentage of market capitalization outside of top 10 largest companies, the percentage of value traded outside of top 10 traded companies, government bond yields (3 month and 10 years), ratio of domestic to total debt securities, ratio of private to total debt securities (domestic), and ratio of new corporate bond issues to GDP.

# _3.3. Financial Efficiency_

For intermediaries, efficiency is primarily constructed to measure the cost of intermediating credit. Efficiency measures for institutions include indicators such as overhead costs to total assets, net interest margin, lending-deposits spread, non-interest income to total income, and cost to income ratio (Table 1). Closely related variables include measures such as return on assets and return on equity. While efficient financial institutions also tend to be more profitable, the relationship is not very close (for example, an inefficient financial system can post relatively high profitability if it operates in an economic upswing, while an otherwise efficient system hit by an adverse shock may generate losses).

As with the other dimensions, these are relatively crude measures of efficiency. For a sub-set of countries, it is possible to calculate efficiency indices based on data envelopment analysis and other more sophisticated measures (e.g., Angelidis and Lyroudi 2006 apply data envelopment