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FINANCIAL INCLUSION AND POVERTY REDUCTION IN ACEH PROVINCE: COMPARISON BETWEEN CORE REGION AND PERIPHERY REGION

ALIASUDDIN

Associate Professor at the Department of Economics, Faculty of Economics and Business, Universitas Syiah Kuala, Banda Aceh, Indonesia

aliasuddin@unsyiah.ac.id

Taufiq C. DAWOOD

Assistant Professor at the Department of Economics, Faculty of Economics and Business, Universitas Syiah Kuala, Banda Aceh, Indonesia

taufiq.dawood@unsyiah.ac.id

Nanda RAHMI

Assistant Professor at the Department of Economics, Faculty of Economics and Business, Universitas Syiah Kuala, Banda Aceh, Indonesia

nanda_rahmi84@unsyiah.ac.id

Abstract

This study analyzes the role of financial inclusion on poverty reduction in Aceh Province, the comparison between the core region (Banda Aceh) and periphery region (Aceh Besar).  This study uses cross-sectional data from Banda Aceh and Aceh Besar with sample total of 598 and 686 households, respectively.  The logistic model is used in this study.  The results show that financial inclusion is negatively not significant in Banda Aceh but negatively significant in Aceh Besar.  Meanwhile, sex and educational level are negatively significant in Banda Aceh and Aceh Besar, and family size is positively significant in both regions.  The biggest marginal effect on poverty is sex in Banda Aceh and Aceh Besar regions.  Female is more vulnerable to be poor compared to male in term of poverty

Keywords: financial inclusion, Aceh, poverty reduction, logistic

JEL classification: N95, B23, B26, I32

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