Bridging the Gap: The Role of Financial Inclusion in Poverty Alleviation and Income Equality in the Association of Southeast Asian Nations (ASEAN)

Purpose: The study explores the importance of financial inclusion in poverty alleviation and income equality in the Association of Southeast Asian Nations (ASEAN). A central question of this study is how access to financial services can affect socioeconomic disparities; in other words, how financial inclusion can drive and boost economic stability and economic growth in various economic contexts. Methodology: The study adopted a quantitative approach with a survey method, using data obtained from 515 respondents from different ASEAN countries. The techniques in this research are regression and correlation tests, which aim to find the relationship between financial inclusion and its effect on poverty alleviation and income inequality. Findings: The results of the research show that there is a strong positive relationship, namely financial inclusion is positively associated with poverty alleviation (standardized beta coefficient [β] = 0.712, probability value [p] < 0.001) and income equality (β = 0.489, p < 0.001). The results indicate that improving financial inclusion can be effective in supporting poverty alleviation and reducing income inequality in the region. Unique Contribution to Theory, Practice and Policy: The implications of the findings suggest that ASEAN policymakers should work towards a holistic financial inclusion approach. This approach should target improving access to financial services, financial literacy, and the adoption of digital financial technology for more equitable sharing of the benefits from economic growth in all parts of society. As such, financial inclusion can be used as a steppingstone to sustainable development and an equitable economic landscape for ASEAN countries.