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Financial Inclusion in Indonesia: An Analysis of Determinants of Bank Account Ownership and Credit Access at Individual andBank Account Ownership and Credit Access at Individual and Regional LevelsRegional Levels

Author

Listed:
  • Rindi Ardika Melsalasa Sahputri

    (Politeknik Manufaktur Negeri Bangka Belitung, Bangka Belitung Islands, Indonesia)

  • Sujarwoto

    (Brawijaya University, East Java, Indonesia)

  • Septiana Sihombing

    (Politeknik Manufaktur Negeri Bangka Belitung, Bangka Belitung Islands, Indonesia)

  • Muhamad Galy Njoman

    (Politeknik Manufaktur Negeri Bangka Belitung, Bangka Belitung Islands, Indonesia)

Abstract

Financial inclusion is widely recognized as a key driver of economic prosperity, yet many countries face considerable challenges in achieving it. This study empirically explores financial inclusion in Indonesia, focusing on bank account ownership and credit access, with the primary objective of identifying their determinants through a comparison of individual- and regional-level factors. Individual-level factors cover sociodemographic characteristics, poverty, and income inequality, while regional-level factors include regional economic development and financial infrastructure. Data were sourced from the National Socio-Economic Survey (SUSENAS) and the Village Potential Survey (PODES), consisting of 804,703 samples across 514 districts. A multilevel regression approach, using Generalized Linear Latent and Mixed Models (GLLAMM), was employed to estimate the contributions of these factors to bank account ownership and credit access. Results reveal gaps in credit access and bank account ownership across regions, with individual-level factors emerging as prominent determinants of financial inclusion compared to district-level factors.

Suggested Citation

  • Rindi Ardika Melsalasa Sahputri & Sujarwoto & Septiana Sihombing & Muhamad Galy Njoman, 2024. "Financial Inclusion in Indonesia: An Analysis of Determinants of Bank Account Ownership and Credit Access at Individual andBank Account Ownership and Credit Access at Individual and Regional LevelsRegional Levels," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 70, pages 81-96, December.
    • Handle: RePEc:lpe:efijnl:202406
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    References listed on IDEAS

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    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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