Financial inclusion and poverty alleviation: Does it work? (Studies in lower-middle-income countries)

Abstract

A stable financial system can build a country's economy. Financial inclusion is one of the strategies undertaken to improve the economy and alleviate poverty. Poverty is a troubling problem for every country. Both developing and developed countries face poverty. Therefore, poverty must be eradicated immediately. This study analyzes financial inclusion in poverty alleviation in five lower-middle-income countries (Indonesia, Myanmar, Laos, Pakistan, and Bangladesh). The variables used in this study are the number of credit accounts, the number of savings accounts, the number of debits, the number of bank branch offices, and economic growth. This research uses secondary data or time series from 2010-2020. The method used in this study is the ARDL Panel method. The panel shows that countries with leading indicators for poverty alleviation are Indonesia, Myanmar, and Pakistan. Meanwhile, the leading indicators variables are the number of creditors, the amount of savings, and the number of debits in the five lower-middle-income countries.