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Indonesian Muslim Household Financial Inclusion Profile: Evidence from IFLS4 and IFLS5 Panel Data

Author

Listed:
  • Novat Pugo Sambodo

    (Centre for Research in Islamic Economics and Business (PKEBS), Faculty of Economics and Business, Universitas Gadjah Mada)

  • Riswanti Budi Sekaringsih

    (Centre for Research in Islamic Economics and Business (PKEBS), Faculty of Economics and Business, Universitas Gadjah Mada and Department of Islamic Economics, Faculty of Islamic Economics and Business, State Islamic University (UIN) Sunan Kalijaga Yogyakarta)

  • Meikha Azzani

    (Centre for Research in Islamic Economics and Business (PKEBS), Faculty of Economics and Business, Universitas Gadjah Mada)

  • Esa Assyahid

    (Centre for Research in Islamic Economics and Business (PKEBS), Faculty of Economics and Business, Universitas Gadjah Mada)

Abstract

This research aims to explore and examine empirically Indonesian Muslim financial inclusion profile using panel data. We explore various indicators for example if individual have borrowed money from financial institution, having an account, amount of borrowed money, and amount of money saved in financial services. This research uses IFLS (Indonesian Family Life Survey) fourth wave (2007) and fifth wave (2014) that has wide range information on financial inclusion indicators and other socio-economics variables that are not provided by other almost-similar-type database in Indonesia. We use Ordinary Least Square and Logit estimation to estimate what factors determine the probability of individual to have an access to financial service and the amount of money and individual has on average. The findings suggest that those who have better access to financial services are coming from urban area with better wealth, mostly are male and live in urban area. Banks remain to be a dominant source for Muslim in Indonesia to get a loan. Another determinant factor that increases the possibility for Indonesian to get loan is whether an individual has access to commercial bank like Bank Republik Indonesia (BRI). Baitul Maal WatTamwil (BMT) as one of Islamic microfinance is found to be statistically significant to increase probability of Indonesian Muslim to get an access to loans.

Suggested Citation

  • Novat Pugo Sambodo & Riswanti Budi Sekaringsih & Meikha Azzani & Esa Assyahid, 2016. "Indonesian Muslim Household Financial Inclusion Profile: Evidence from IFLS4 and IFLS5 Panel Data," Universitas Gadjah Mada Working Papers on Islamic Economics and Finance 2017007, Universitas Gadjah Mada, Faculty of Economics and Business.
    • Handle: RePEc:ugm:wpaper:2017007
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Financial Inclusion; Muslim; OLS; Logit; IFLS;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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