Analysis of the Financial Banking Intermediary Function on Economic Growth and Poverty in East Kalimantan from 2011 to 2022

Abstract

Banking intermediation in Indonesia is crucial because it directly affects economic growth to accommodate and channel capital from depositors to debtors to be used for production activities, encouraging economic growth in a region, in a certain period. The increase in economic growth caused by banking intermediation will directly or indirectly affect various aspects, one of which is the poverty rate. This paper aims to look at the effect of banking intermediation on economic growth directly and its effect on poverty levels both directly and indirectly through economic growth in East Kalimantan Province. The dataset used in this study comprises secondary time series data spanning from 2011 to 2022, sourced from the East Kalimantan Province’s BPS (Central Bureau of Statistics) and the Indonesian Financial Services Authority. To analyze these relationships, this study employed path analysis with SPSS 25. The findings of this research revealed that banking intermediation in East Kalimantan Province had a direct impact on economic growth in the same region. However, the relationship between banking intermediation and economic growth in East Kalimantan Province did not have a direct effect on poverty levels in the region. Instead, the influence of banking intermediation in East Kalimantan Province on poverty levels operates indirectly through its impact on economic growth. Keywords: financial intermediary, economic growth, poverty