Determinants of Financial Inclusion in Indonesia
Chairilisa Azzahra (a), Rahmatina A. Kasri (b)
a) Faculty of Economics and Business
University of Indonesia
Depok, Indonesia
a) Faculty of Economics and Business
University of Indonesia
Depok, Indonesia
Abstract
Financial inclusion has become an interested issue and an important public policy priority following the recent global financial crisis. In Indonesia, government, banking sector and other related parties have focus to achieve higher rate of financial inclusion through various ways. This paper measure the index of financial inclusion in Indonesia covering three dimensions; accessibility, availability and the usage of banking services and also to see the level of financial inclusion in banking industry, considering the banking sector has an important role in driving the increase in the level of financial inclusion. To measure the index of financial inclusion we use a methodology that was proposed by Sarma (2012). We also attempt to identify the factors: banking variables and macro economic factors that are associated with banking financial inclusion in Indonesia. The results show that nowdays Indonesia has a high level of financial inclusion and following by ten banks with high IFI values categories are the banks with the largest assets in Indonesia.
Keywords: Financial inclusion; index of financial inclusion; banking services
Topic: Finance