Hi,

generally speaking, there are some widely accepted variables to capture the financial sector development: credit-to-GDP, liquidity and capital adequacy indicators, MES, SRISK, financial cycle index (if provided), house price index (to cover for the latest global financial crisis), risk-weighted assets, total banking sector assets, interest rate spread, risk premia, etc.

But judging from your project you listed related to your question, your sample country is Ethiopia correct? In that case, you should be able to get these from NBE or WB - risk premia, banking sector assets, interest rate spread. 

And just one final note: it would be justifiable to use just total credit-to-GDP ratio if you are having troubles finding private sector data. 

You can also check some publications related to your question:

http://www.bis.org/ifc/publ/ifcb31ab.pdf

https://www.cnb.cz/miranda2/export/sites/www.cnb.cz/en/financial_stability/fs_reports/fsr_2010-2011/fsr_2010-2011_article_1.pdf (see Annex Table 1 for list of potential indicators)

Hi,

IMF introduces a broad based financial development index:, see https://www.imf.org/external/pubs/ft/wp/2016/wp1605.pdf

Thank you all for your valuable answers.

You can also use market capitalisation to GDP

You can also have a look at WEF database and maybe You will find some interesting indices there:

https://knoema.com/atlas/topics/Economy 

There are number of proxies used to measure financial development. Some are purely from economics perspective while some are based on finance. It depends on your study and the other relavent variables that you are using in your model. If i do some brainstorming i have seen many proxies for financial development. some of the random names that comes to my mind are stock market capitalization to DGP this shows the oppenness fo financial market. This variable is very useful for economies with liberalized stock markets. I have also seen studies using broad money to GDP, investment to GDP and so on

I would suggest the ratio of domestic credit to private sector to GDP as a proxy for financial development.

Stock market capitalization, domestic credit to private sector to GDP , and Money supply to GDP ratio can be used as a proxy for financial development.

Financial depth