INVESTIGATION OF FINANCIAL INCLUSION, FINANCIAL TECHNOLOGY, ECONOMIC FUNDAMENTALS, AND POVERTY ALLEVIATION IN ASEAN-5: USING SUR MODEL

This study investigated the effect of financial inclusion and fintech on economic
fundamentals and poverty rates in five developing countries in ASEAN (ASEAN-5) using the
Seemingly Unrelated Regression (SUR) model during the period 2009 to 2019. The results
obtained are: (1) Financial inclusion through the credit variable and the number of ATMs, and
fintech through the e-money variable, contributed to the most significant increase in GDP in
the ASEAN-5 countries. Meanwhile, the most critical contributor to reduction in the
unemployment rate from financial inclusion is through the credit and savings variables, while
from fintech it is through mobile phone subscriptions. (2) Thailand is the country that has most
effectively influenced the economic fundamental of unemployment rate, while Indonesia is the
country that has most effectively influenced the economic fundamental of GDP. The results
obtained from the panel regression model and cross-sectional weighting indicate that financial
inclusion through savings, credit, and number of ATMs, and fintech through cellular phone
subscription, are effective in reducing poverty rates in the ASEAN-5 countries. Nevertheless,
financial inclusion and fintech do not significantly affect the inflation rate.