Abstract:

Mobile phones and the internet are a form of ICT that can be used as a tool in increasing financial inclusion. ICT can improve financial inclusion in two ways: increasing the supply side (providing digital financial services) so that it can reduce transaction costs of formal financial institutions and increasing the demand side in the form of increasing financial literacy because of the increasing information flows and knowledge of finance (Sarma & Pais 2008; Ouma, Odongo & Were, 2017; Kabakova & Plaksenkov, 2018). Indonesia is a country with a digital base that continues to grow. This study is interested in seeing whether mobile phone and internet use in Indonesia households improve household access to formal financial services. This study uses usenas 2017 data and 2018 Podes with data at the household level for all cities/districts in Indonesia. Using Poisson and Logistic regression, study found that ownership of mobile phones and internet access in Indonesian households has positive correlation to the ownership of savings accounts in formal financial institutions.