Nexus of Finacial Inclusion and Human Development as an Important Role in Economic Growth: Evidence from ASEAN Countries

Abstract

This study aims to analyze the interaction between the financial inclusion index and HDI, the financial inclusion index and HDI nexus with GDP. The financial stability problem in developing ASEAN countries is still motivated by the high level of banking NPLs. This study uses panel data with the Generalized Method of Moment as an analytical method. The selection of the vulnerable research year is motivated by the phenomenon. The result showed ATM and Human Development Index have a positive impact on GDP growth and also shows that financial inclusion and the human development index are important drivers of ASEAN-7 economic growth. Determining financial inclusion as a national strategy in several countries places the financial sector as a vital indicator of change. However, it should be remembered for the relevant authorities that the fact that ASEAN banks still have problems with NPLs is too high, so further attention is needed on the concept of prudence in the process of increasing the implementation of financial inclusion indicators so as not to become a boomerang for banking liquidity.