Social Economic Analysis of Financial Inclusion and Poverty in Indonesia

This article analyzes the impact of financial inclusion on poverty in Indonesia using data from the 2020 National Socioeconomic Survey (Susenas), with household heads as the sample. The study posits the hypothesis that financial inclusion significantly contributes to poverty reduction. The analytical method applied is the probit logit model, considering that the dependent variable is binary. The results indicate that financial inclusion has a negative and significant effect on poverty, with a probability of 0.000 at a 5% significance level. This suggests that increasing financial inclusion can reduce the risk of poverty by up to 8.2%. These findings underscore the importance of access to and use of financial services for households in the effort to alleviate poverty. Therefore, policies are needed to support the enhancement of financial inclusion through the expansion of access to financial services, improvement of financial literacy, adjustment of financial products and services, and cross-sector coordination among the government, private sector, and financial institutions.

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Publication Details

Journal
Zenodo (CERN European Organization for Nuclear Research)
Published
2024-12-04
DOI
https://doi.org/10.5281/zenodo.14272825
Primary Topic
Microfinance and Financial Inclusion
Type
article
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article

Social Economic Analysis of Financial Inclusion and Poverty in Indonesia

Zenodo (CERN European Organization for Nuclear Research)
Microfinance and Financial Inclusion
article

Social Economic Analysis of Financial Inclusion and Poverty in Indonesia

article en

Abstract

This article analyzes the impact of financial inclusion on poverty in Indonesia using data from the 2020 National Socioeconomic Survey (Susenas), with household heads as the sample. The study posits the hypothesis that financial inclusion significantly contributes to poverty reduction. The analytical method applied is the probit logit model, considering that the dependent variable is binary. The results indicate that financial inclusion has a negative and significant effect on poverty, with a probability of 0.000 at a 5% significance level. This suggests that increasing financial inclusion can reduce the risk of poverty by up to 8.2%. These findings underscore the importance of access to and use of financial services for households in the effort to alleviate poverty. Therefore, policies are needed to support the enhancement of financial inclusion through the expansion of access to financial services, improvement of financial literacy, adjustment of financial products and services, and cross-sector coordination among the government, private sector, and financial institutions.

Zenodo (CERN European Organization for Nuclear Research)
State University of Padang (ID), Andalas University (ID)
Reduced inequalities
Openalex Percentile: Top 32%
Microfinance and Financial Inclusion
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Social Economic Analysis of Financial Inclusion and Poverty in Indonesia · Zenodo (CERN European Organization for Nuclear Research) (2024) | TGRS Research Map | TGRS