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Regional financial inclusion and poverty: Evidence from Indonesia

Author

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  • Iwan Fathi Fauzan
  • Muhammad Firdaus
  • Sahara Sahara

Abstract

This paper builds a financial inclusion index of thirty-three provinces in Indonesia from formal financial institutions banks. It aim at analyzing how the financial inclusion index relates to regional poverty using a spatial panel econometric approach. Findings/Originality: The results show that the average financial inclusion index of each province in Indonesia is still in a low category, and there is a financial system development inequality between DKI Jakarta Province and other regions. We also find that poverty has a significant negative effect on the financial inclusion index. With the recent migration of residents as a spatial weighting matrix, we decompose the global effect of the poverty variable on the financial inclusion index into a local effect for each province.

Suggested Citation

  • Iwan Fathi Fauzan & Muhammad Firdaus & Sahara Sahara, 2020. "Regional financial inclusion and poverty: Evidence from Indonesia," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 12(1), pages 25-38.
    • Handle: RePEc:uii:journl:v:12:y:2020:i:1:p:25-38:id:14210
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    File URL: https://journal.uii.ac.id/JEP/article/view/14210/10098
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    Cited by:

    1. Pavel V. Stroev & Olga V. Pivovarova & Khasanbi V. Sheozhev & Anna I. Dudnik, 2023. "Regions with Low Financial Sustainability: Analysis and Enhancement of Development," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 1, pages 26-44, February.

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