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Financial Inclusion and GDP per capita: a Panel Data Analysis

Financial Inclusion and GDP per capita: a Panel Data Analysis
Panji Surya Putra
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This thesis is about analyzing the effect of financial inclusion to GDP per capita. The aim of this research is to know the relationship between financial inclusion and GDP per capita. In order to do that the author had created financial inclusion index based on several dimension arranged by Mandira Sarma research about measuring the financial inclusion. This method created the financial inclusion index based on 3 dimensions which consist of 5 variables. Those variables are deposits account for penetration dimension, number of ATM and bank branches per 100.000 adults for availability dimension and the total of deposit and credit ratio to GDP for usage dimension. The data availability was 46 countries across 7 year period from 2009 until 2015. The author decided to divide those 46 countries by geographical location in the continent for each corresponding countries. Those groups are 13 countries that geographically located from Africa become Africa group, 18 countries located in Asia become Asia group, and 15 countries located in Europe become Europe group.
This study uses quantitative analysis method. Quantitative analysis method was used to analyze the statistical panel data regarding each of the variables, more importantly, the impact of financial inclusion index to real GDP per capita.
The result of this research can be concluded that financial inclusion index has a positive and significant relationship to GDP per capita for each corresponded group. There are weakness for this research, the dimension of barrier to financial services are not included because it is difficult to determine the variables for barrier and the data are scarce. Another weakness is that the number of countries might not represent the whole continent as the author could only gathered several of the countries from each continent. Even though it does not represent the whole continent, this research still can be useful to give us an insight as to the effect of financial inclusion to GDP per capita