Determinants of financial inclusion in Indonesia: an empirical evidence from global findex data

Financial inclusion is an important component of broad-based financial participation, yet access remains uneven across socioeconomic and demographic groups in Indonesia. This study examines the factors associated with financial inclusion and its barriers using the 2021 Global Findex dataset covering 1,062 respondents across socio-economic and demographic groups. Binary logistic regression is employed to estimate the probability of account ownership, saving, and borrowing in formal and informal institutions, with education, income, gender, age, and residence as explanatory variables. The findings show that education and income are the most consistent factors associated with financial inclusion. Higher educational attainment is associated with a higher probability of account ownership and saving, while higher-income groups are more likely to save and borrow formally. Informal saving remains prevalent even among educated and wealthier groups, reflecting socio-cultural mechanisms such as arisan. Gender gaps are relatively small, although women show stronger informal saving behaviour, while urban residents enjoy broader access than rural residents. Key barriers include insufficient income, high costs, and perceived lack of need for accounts. Overall, financial inclusion in Indonesia operates through a dual system in which formal and informal financial practices coexist and may provide different mechanisms for household financial resilience. Policy should strengthen education-based inclusion, low-cost accounts, women-oriented savings products, mobile banking, local banking agents, digital payment infrastructure, and reliable rural connectivity.