Analysis of Financial Inclusion on Economic Growth of Indonesia For The Years 2016-2022

Abstract

To achieve sustainable development goals, the government in Indonesia implements a financial inclusion strategy with the aim of improving economic growth in order to achieve sustainable economic development. This study aims to identify the conditions of financial inclusion (the dimensions of banking penetration, the dimensions of the availability of banking services, and the dimensions of the use of banking services) and analyze their impact on economic growth in Indonesia in 2016-2022. The method of analysis in this study is to use descriptive statistical analysis and panel data regression with simple regression analysis. The results of the descriptive analysis show that overall the financial inclusion index in Indonesia has fluctuated and tends to fall into the medium category. The results of panel data regression with simple regression analysis using the Random Effect Model show that the Financial Inclusion Index has a positive and significant effect on economic growth in Indonesia in 2016-2022. Based on the results of research with an increase in financial inclusion, economic growth will also increase.