Branchless Banking Strategy and Financial Inclusion in Indonesia
Chairilisa Azzahra and Rahmatina A. Kasri
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 i.e. branchless banking. Branchless banking causing a shift from conventional financial services in the form of bank-based services to non-bank-based. Branchless banking have grown in various forms in many countries including in Indonesia and one of this services namely Laku Pandai. Expanding branchless banking through Laku Pandai can be an alternative channel to give individual or household better access to formal financial services and directly contribute to financial inclusion index. This paper measure the index of financial inclusion in Indonesia covering three dimensions; accessibility, availability and the usage of banking services and attempts to identify the factors: banking variables and social economic factors that are significantly associated with financial inclusion in Indonesia. Using classical regression, the results suggest that banks implementing branchless banking ‘Laku Pandai- have an effect to financial inclusion in Indonesia while among social economic factors, as expected, income proxy by GDP per capita is positively associated with the level of financial inclusion.
Keywords: Financial inclusion, Banking services, Branchless banking
Topic: Other Related Topics