Impact of Financial Inclusion and Social Inclusion on Economic Growth in North Sumatera Province: A Panel Data Approach

ABSTRACT: The government has introduced the inclusion of financial policy since 2012. However, the application of the inclusion financial policy that has been running for more or less five years still requires a solution to the problems faced in the field. This solution is not only an obligation for the government but also for all parties, especially researchers. This study aims to determine the impact of financial inclusion and social inclusion financial effects on economic growth in 33 districts/cities in North Sumatera Province. The independent variables examined in terms of financial inclusion are the amount of community savings, while in terms of social inclusion, that is the number of poor people and the level of education, and the dependent variable is the Gross Regional Domestic Product (GDRP) during the period 2011-2018. The type of analysis used in the study is by using panel data analysis, which is the combined data from time series and cross-sections. The results showed that financial inclusion in terms of the amount of public savings turned out to play a crucial role in improving the economy. Social inclusion in terms of education also played a critical role in improving the economy in 33 districts/cities in North Sumatera Province.
KEYWORDS: Financial Inclusion, Social Inclusion, GDRP, North Sumatera Province