Analysis of determining the financial inclusion index of composite, conventional and sharia banking in Indonesia

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In Indonesia financial inclusion remains a challenge. This study looked at how the human development index, gross domestic product, and the number of offices of banks affect the financial index in 34 Indonesian provinces for composite, conventional, and sharia banking. This study uses panel data from 2016 to 2019 to address research questions. According to the findings of this study, economic growth, human development index, regional gross domestic product per capita, and bank brances significantly influence the financial inclusion index of the composite banking. Meanwhile, economic growth, human development index, gross domestic product per capita, and the number of bank branches impact the financial inclusion index of conventional banking. However, the financial inclusion index for sharia banking shows that only economic growth variables, regional gross domestic product per capita, and the number of sharia bank branches have a significant influence. The human development index variable does not have a significant influence. Based on these findings, the Financial Service Authority (OJK) and Bank Indonesia must promote a conducive climate for increasing the financial inclusion of banking in Indonesia for both conventional and Islamic banks.

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    • Table 1. Research variables
    • Table 2. Descriptive statistic of variables
    • Table 3. The Wald test on the panel regression model
    • Table 4. The Hausman test on the panel regression model
    • Table 5. Effect of EG, HDI, GDPR/Cap and Office on IKKComposite
    • Table 6. Effect of EG, HDI, GDPR/Cap and Office on IKKConventional
    • Table 7. Effect of EG, HDI, GDPR/Cap and Office on IKKSharia
    • Conceptualization
      Eleonora Sofilda, Muhammad Zilal Hamzah, Ari Mulianta Ginting
    • Data curation
      Eleonora Sofilda
    • Formal Analysis
      Eleonora Sofilda, Muhammad Zilal Hamzah
    • Funding acquisition
      Eleonora Sofilda, Ari Mulianta Ginting
    • Investigation
      Eleonora Sofilda
    • Methodology
      Eleonora Sofilda
    • Project administration
      Eleonora Sofilda, Ari Mulianta Ginting
    • Resources
      Eleonora Sofilda, Muhammad Zilal Hamzah, Ari Mulianta Ginting
    • Software
      Eleonora Sofilda
    • Writing – original draft
      Eleonora Sofilda
    • Supervision
      Muhammad Zilal Hamzah, Ari Mulianta Ginting
    • Validation
      Muhammad Zilal Hamzah, Ari Mulianta Ginting
    • Writing – review & editing
      Muhammad Zilal Hamzah, Ari Mulianta Ginting