Mobile Technologies, Financial Inclusion, and Inclusive Growth in East Indonesia

Main Article Content

Miguel Angel Esquivias
Lilik Sugiharti
Ari Dwi Jayanti
Rudi Purwono
Narayan Sethi


Financial Inclusion, Mobile technologies, Inclusive Growth, Financial institutions, Indonesia


This paper examines the influence of mobile technologies on financial inclusion, and the matter of whether mobile technologies and financial inclusion have an impact on the income of individuals in East Indonesia, considering the data from the Survey on Financial Inclusion and Access (SOFIA) in 2017. A seemingly unrelated probit model and an ordinary least-squares model are used to compare both determinants of formal and informal financial services, as well as simple and smart mobile technologies. The study finds that mobile technologies and access to finance significantly increase the likelihood of higher incomes. Smart technologies and formal finance have higher effects on incomes compared to the effects of simple devices or semi-formal and informal finance. Significant gaps in financial access exist between individuals in accordance with gender, income, education, and location. Technologies account for a small difference in the broader access to financial services.


Download data is not yet available.


Metrics Loading ...
Abstract 238 | 253-PDF-v8n2pp123-145 Downloads 4


Aayog, N.I.T.I. (2015). Report of the expert committee on innovation and entrepreneurship. New Delhi: Government of India.
Abor, J. Y., Amidu, M., & Issahaku, H. (2018). Mobile telephony, financial inclusion and inclusive growth. Journal of African Business, 19(3), 430–453.
Allen, F., Demirguc-Kunt, A., Klapper, L., & Martinez Peria, M. S. (2016). The foundations of financial inclusion: Understanding ownership and use of formal accounts. Journal of Financial Intermediation, 27(C), 1–30.
Allen, F., Demirguc-Kunt, A., Klapper, L., & Peria, M. S. M. (2012). Foundations of Financial Inclusion. Policy Research Working Paper, 6290. The World Bank.
Allen, F., Qian, M., & Xie, J. (2018). Understanding informal financing. Journal of Financial Intermediation.
Arun, T., & Kamath, R. (2015). Financial inclusion: Policies and practices. IIMB Management Review, 27(4), 267–287.
Asongu, S. (2015). The impact of mobile phone penetration on African inequality. International Journal of Social Economics, 42(8), 706–716.
Asongu, S. A. (2013). How has mobile phone penetration stimulated financial development in Africa? Journal of African Business, 14(1), 7–18.
Asongu, S. A., & Nwachukwu, J. C. (2016). Mobile phone penetration, mobile banking and inclusive development in Africa. African Finance Journal, 18(1), 34–52.
Aterido, R., Beck, T., & Iacovone, L. (2013). Access to finance in Sub-Saharan Africa: Is there a gender gap? World Development, 47, 102–120.
Beck, T., & Demirgüç-Kunt, A. (2008). Access to finance: An unfinished agenda. The World Bank Economic Review, 22(3), 383–396.
Beck, T., Demirguc-Kunt, A., & Martinez Peria, M. S. (2007). Reaching out: Access to and use of banking services across countries. Journal of Financial Economics, 85(1), 234–266.
Bruhn, M., & Love, I. (2014). The real impact of improved access to finance: Evidence from Mexico. The Journal of Finance, 69(3), 1347–1376.
Brune, L., Giné, X., Goldberg, J., & Yang, D. (2016). Facilitating Savings for Agriculture: Field Experimental Evidence from Malawi. Economic Development and Cultural Change, 64(2), 187–220.
Bulman, D., Eden, M., & Nguyen, H. (2014). Transitioning from low-income growth to high-income growth: is there a middle income trap?. The World Bank.
Burgess, R., & Pande, R. (2005). Do Rural Banks Matter? Evidence from the Indian Social Banking Experiment. American Economic Review, 95(3), 780–795.
Chauvet, L., & Jacolin, L. (2017). Financial Inclusion, Bank Concentration, and Firm Performance. World Development, 97, 1–13.
Cole, S., Sampson, T., & Zia, B. (2011). Prices or knowledge? What drives demand for financial services in emerging markets? The Journal of Finance, 66(6), 1933–1967.
Corrado, G., & Corrado, L. (2015). The geography of financial inclusion across Europe during the global crisis. Journal of Economic Geography, 15(5), 1055–1083.
Das, K., Gryseels, M., Sudhir, P., & Tan, K. T. (2016). Unlocking Indonesia’s digital opportunity. McKinsey & Company, 1-28.
Demirgüç-Kunt, A., & Klapper, L. (2012). Financial inclusion in Africa. Policy Research Working Paper. The World Bank Development Research Group Finance and Private Sector Development Team, 1–18.
Demirguc-Kunt, A., & Klapper, L. (2012). Measuring financial inclusion: The global findex database. The World Bank.
Demirguc-Kunt, A., Klapper, L., Singer, D., Ansar, S., & Hess, J. (2018). The Global Findex Database 2017: Measuring financial inclusion and the Fintech revolution. The World Bank.
Demirguc-Kunt, A., Klapper, L., Singer, D., & Van Oudheusden, P. (2013). The global findex database. The World Bank.
Dienillah, A. A., & Anggraeni, L. (2018). Impact of Financial Inclusion on Financial Stability based on Income Group Countries. Bulletin of Monetary Economics and Banking, 20(4), 1–14.
Dupas, P., & Robinson, J. (2013). Savings constraints and microenterprise development: Evidence from a field experiment in Kenya. American Economic Journal: Applied Economics, 5(1), 163–92.
Financial Inclusion Insights Indonesia (FII), (2018).
Fungá?ová, Z., & Weill, L. (2015). Understanding financial inclusion in China. China Economic Review, 34, 196–206.
Ghosh, S., & Vinod, D. (2017). What Constrains Financial Inclusion for Women? Evidence from Indian Micro data. World Development, 92, 60–81.
Greene, W. H. (2003). Econometric analysis (5th Ed.). Englewood Cliffs, NJ: Prentice Hall.
Grohmann, A., Klühs, T., & Menkhoff, L. (2018). Does financial literacy improve financial inclusion? Cross country evidence. World Development, 111, 84–96.
Han, R., & Melecky, M. (2013). Financial inclusion for financial stability: Access to bank deposits and the growth of deposits in the global financial crisis. The World Bank.
Hanh, T. M. P., Daly, K., & Akhter, S. (2016). Bank efficiency in emerging Asian countries. Research in International Business and Finance, 38, 517–530.
Kostov, P., Arun, T., & Annim, S. (2015). Access to financial services: The case of the ‘Mzansi’ account in South Africa. Review of Development Finance, 5(1), 34–42.
Llanto, G. (2015). Financial inclusion, education, and regulation in the Philippines.
Martínez, C. H., Hidalgo, X. P., & Tuesta, D. (2013). Demand factors that influence financial inclusion in Mexico: Analysis of the barriers based on the ENIF survey. BBVA Bank, BBVA Research Working Paper, 1–19.
Mehrotra, A., & Yetman, J. (2015). Financial inclusion-issues for central banks. BIS Quarterly Review March. Available at SSRN:
OECD. (2018). Financial inclusion and consumer empowerment in Southeast Asia. OECD.
Ouma, S. A., Odongo, T. M., & Were, M. (2017). Mobile financial services and financial inclusion: Is it a boon for savings mobilization? Review of Development Finance, 7(1), 29–35.
Park, C.-Y., & Mercado, R. (2015). Financial inclusion, poverty, and income inequality in developing Asia. Asian Development Bank Economics Working Paper Series, 426.
Potnis, D. D. (2015). Beyond Access to Information: Understanding the Use of Information by Poor Female Mobile Users in Rural India. The Information Society, 31(1), 83–93.
Riwayati, H. E. (2017). Financial Inclusion of Business Players in Mediating the Success of Small and Medium Enterprises in Indonesia. International Journal of Economics and Financial Issues, 7(4), 623–627.
Rosengard, J. K., & Prasetyantoko, A. (2011). If the Banks are Doing So Well, Why Can’t I Get a Loan? Regulatory Constraints to Financial Inclusion in Indonesia. Asian Economic Policy Review, 6(2), 273–296.
Rowntree, O. (2018). GSMA Connected Women–The Mobile Gender Gap Report 2018. Report. GSMA, Cambridge, MA.
Sanjaya, I. M., & Nursechafia, N. (2016). Financial Inclusion And Inclusive Growth: A Cross-Province Analysis In Indonesia. Buletin Ekonomi Moneter Dan Perbankan, 18(3), 281–306.
Suri, T., & Jack, W. (2016). The Long-Run Poverty and Gender Impacts of Mobile Money. Science, 354 (6317), 1288–92.
Survey on Financial Inclusion and Access (SOFIA). (2017).
Swamy, V. (2014). Financial Inclusion, Gender Dimension, and Economic Impact on Poor Households. World Development, 56, 1–15.
Tambunan, T. T. (2018). MSMEs and Access to Financing in a Developing Economy: The Indonesian Experience. In Financial Entrepreneurship for Economic Growth in Emerging Nations (pp. 148–172). IGI Global.
Wang, X., & Guan, J. (2017). Financial inclusion: Measurement, spatial effects and influencing factors. Applied Economics, 49(18), 1751–1762.
International Telecommunication Union (ITU), (2018) “World telecommunication/ICT indicators database, “ ITU, Geneva
Yoshino, N., & Morgan, P. (2016). Overview of Financial Inclusion, Regulation, and Education. SSRN Electronic Journal.
Zins, A., & Weill, L. (2016). The determinants of financial inclusion in Africa. Review of Development Finance, 6(1), 46–57.