The Role of Financial Inclusion in Improving Community Welfare: A Study on Cooperative Business

Abstract

Financial inclusion is an important financial intervention strategy for business entities, including cooperative businesses. This research examined the role of financial inclusion in improving community welfare through saving and loan cooperatives and the effect of education level as a moderating variable. The study was correlational using a hypothesis testing method. Primary data were collected through questionnaires distributed to saving and loan cooperative members in Jakarta and its surrounding areas. This study involved 139 respondents chosen purposively: cooperative members and at least graduated from high schools. The analysis employed Structural Equation Modeling (SEM). Findings show that financial inclusion plays a significant role in reducing poverty, with or without being moderated by the education level only on the usage dimension. On the other hand, financial inclusion is not proven to significantly reduce poverty on access and service dimensions.