APPLICATION OF FINANCIAL INCLUSIONS IN INDONESIA: A STUDY ON VULNERABLE GROUP

Abstract

Financial inclusion refers to all efforts aimed at eliminating all forms of price and non-price barriers to people's access to financial services. Financial inclusion is a national development strategy and an influential agenda. The aims of this research are to examine any informal norms or limitations that affect the realization of financial inclusion. Regulative, normative, procedural, and declarative cognition as relaxed norms are thought to influence the implementation of financial inclusion, especially for vulnerable groups. Financial inclusion aims to encourage economic growth through income distribution, poverty alleviation, and financial system stability. This strategy is targeted at groups experiencing obstacles in accessing financial services, especially groups with the greatest needs and financial services that have not been fulfilled, such as poor people and vulnerable groups, in four different locations in Indonesia. As a result of testing several financial inclusion instruments for 254 respondents in this group, it was found that users of financial institution services, both men and women, had similar roles and needs; though government regulation through normative aspects has a positive effect, the procedural elements hurt financial inclusion. Moreover, government regulation through declarative cognitive aspects (the ability to use the dimensions of memory and cognitive skills) has a positive effect on financial inclusion.