Macroeconomic Determinants of Financial Inclusion in ASEAN Countries: Implications for Sustainable Development Goals (SDGs) and Islamic Finance

Abstract

Purpose: This study examines the relationship between financial inclusion and four macroeconomic indicators—economic growth, unemployment rate, interest rate, and the population aged 15 years and above—across ten ASEAN member states. Methodology: Secondary panel data covering 2000–2023 were obtained from the World Bank, the Global Findex Database, and CEIC Data. An Index of Financial Inclusion (IFI) was constructed following Sarma and Pais (2011). Panel unit root tests, Pearson correlation analysis, variance inflation factor diagnostics, and panel ordinary least squares regression were employed. Findings: The regression model explained 57.3% of the variation in financial inclusion. Population aged 15 years and above and unemployment rate were found to have significant positive relationships with financial inclusion, whereas GDP growth and interest rate were statistically insignificant. The findings suggest that demographic structure and labour market conditions play a more important role than aggregate economic growth or borrowing costs in promoting financial inclusion across ASEAN. Unique Contribution to Theory, Policy and Practice: The study provides regional evidence on the macroeconomic determinants of financial inclusion and offers policy implications for advancing the SDGs while supporting the broader objectives of Islamic finance in fostering inclusive and sustainable economic development.