Enhancing Financial Inclusion and Reducing Rural Household Poverty: The Impact of Internet and Mobile Phones

Rifadli D. Kadir, Ghozali Maski, Setyo Tri Wahyudi, Vietha Devia Sagita Sumantri, Chitra Yuliashri Katili and Nurul Fadhilah

Economic Studies journal, 2026, issue 4, 137-157

Abstract: This study examines the role of digital technologies, particularly internet and mobile phone use, in increasing financial inclusion and reducing household poverty in rural Eastern Indonesia. The main objective of this study is to analyse the impact of internet and mobile phone use on financial inclusion and to measure their contribution to poverty reduction in areas with limited infrastructure. The research method uses data from the 2024 National Socio-Economic Survey (Susenas), focusing on rural households on four islands in Eastern Indonesia. The analysis employed OLS and Probit models to estimate the effects of digital technology and financial inclusion on poverty. Key findings suggest that internet and mobile phone use have a positive effect on financial inclusion, which in turn contributes to poverty reduction. However, the impact is not always optimal in regions with limited infrastructure, where the interaction between financial inclusion and digital technologies can sometimes exacerbate economic inequality. The study's implications highlight the need for policies that strengthen digital infrastructure, improve financial literacy and digital skills among rural communities, and maximise technology's potential to reduce poverty.

JEL-codes: D14 I32 O12 O15 O33 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:bas:econst:y:2026:i:4:p:137-157

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