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A New Economic Perspective: Understanding The Impact Of Digital Financial Inclusion On Indonesian Households Consumption

Author

Listed:
  • Alwahidin N

    (Institut Agama Islam Negeri Kendari)

  • Arlita Jufra

    (Institut Agama Islam Negeri Kendari)

  • Beti Mulu

    (Institut Agama Islam Negeri Kendari)

  • Kiki Novita Sari

    (Institut Agama Islam Negeri Kendari)

Abstract

The fifth wave of the Indonesian Family Life Survey (IFLS), conducted in 2014, is used to compile the cross-sectional data for this study. Information on household consumption on a per-person basis is used. This study investigates how people’s access to digital financial services influences their discretionary spending in Indonesia.We find that household spending increased alongside internet penetration. Our research suggests that low and middle-income families benefit the most from the accessibility to and convenience of digital finance. We conclude that digital banking positively affects consumer spending due to factors such as higher earnings, more opportunities for investment, less friction during financial transactions, higher levels of security, and looser liquidity requirements.

Suggested Citation

  • Alwahidin N & Arlita Jufra & Beti Mulu & Kiki Novita Sari, 2023. "A New Economic Perspective: Understanding The Impact Of Digital Financial Inclusion On Indonesian Households Consumption," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 26(2), pages 333-360, May.
    • Handle: RePEc:idn:journl:v:26:y:2023:i:2f:p:333-360
    DOI: https://doi.org/10.59091/1410-8046.2070
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Household consumption; Digital financial inclusion; Mediating effect; Indonesian family life survey (IFLS); Internet usage index;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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