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ABSTRACT:

This article analyzes the impact of financial inclusion on poverty in Indonesia using data from the 2020 National Socioeconomic Survey (Susenas), with household heads as the sample. The study posits the hypothesis that financial inclusion significantly contributes to poverty reduction. The analytical method applied is the probit logit model, considering that the dependent variable is binary. The results indicate that financial inclusion has a negative and significant effect on poverty, with a probability of 0.000 at a 5% significance level. This suggests that increasing financial inclusion can reduce the risk of poverty by up to 8.2%. These findings underscore the importance of access to and use of financial services for households in the effort to alleviate poverty. Therefore, policies are needed to support the enhancement of financial inclusion through the expansion of access to financial services, improvement of financial literacy, adjustment of financial products and services, and cross-sector coordination among the government, private sector, and financial institutions.

KEYWORDS:

Financial Inclusion, Poverty, Household Heads, Probit Logit.

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