The impact of financial inclusion on poverty in the ASEAN-8 countries

Abstract

One of the effects of financial inclusion in countries and regions is that it plays a significant role in poverty alleviation. This study analyzes the impact of financial inclusion on poverty in ASEAN-8 countries, including Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Thailand, and Vietnam. The authors employed panel data, which includes macro and micro annual data from 8 countries over 17 years from 2004 to 2020. The authors also do a thorough study of the impacts of different aspects of financial inclusion, such as the quantity of bank accounts, debit cards, credit cards, ATMs, branches, outstanding loans, and bank deposits. Using a random effects model, the study shows that financial inclusion, which is measured by a financial inclusion index, helps reduce poverty in the ASEAN-8 countries. Also, the main things that affect the negative relationship between financial inclusion factors and poverty are the number of bank accounts, the use of debit and credit cards, and the amount of money that people deposit in banks compared to their GDP. In addition, economic growth and government spending on education have negatively impacted poverty in these countries. The findings of this study provide practical implications for poverty reduction in the ASEAN-8 countries.