• Ekki Syamsulhakim
    Ekki Syamsulhakim

Social Assistance as Means to Improve Credit Access for Poor Households



One of the objectives of the Sustainable Development Goals/SDGs is to solve the problem of poverty. In Indonesia, the poverty alleviation program consists of the provision of social assistance programs, health insurance, and improving economic capacity and income (including giving credit access). The type of social assistance programs received by beneficiaries depend on their welfare status. Most of the recipients of the social assistance programs are financially constrained, therefore access to credit seems problematic. Nevertheless, one may think that the social assistance programs – especially cash transfers – may be seen as additional income for the poor households. On the other hand, receiving in-kind social assistance program can relax budget constraint face by them. In this paper, we use different years of the Susenas data and employ the Pooled Probit model to estimate the relationship between receiving social assistance and credit access among poor households in Indonesia.The estimation result shows that in general there is a positive relationship between receiving social assistance and credit access, indicating that social assistance may be a way to induce financial inclusion.