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THE IMPACT OF FINANCIAL INCLUSION ON INCOME INEQUALITY IN SELECTED ASEAN MEMBER COUNTRIES

Income inequality is one of the ASEAN nations' challenges. Financial inclusion has becomea focus of policy in certain countries to reduce income inequality. This study aims to determine whether financial inclusion can lessen income disparity in selected ASEAN member nations.

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Income inequality is one of the ASEAN nations' challenges. Financial inclusion has become a focus of policy in certain countries to reduce income inequality. This study aims to determine whether financial inclusion can lessen income disparity in selected ASEAN member nations. Using Principal Component Analysis (PCA) alongside simple linear regression analysis, this study employed an exploratory research approach. The results showed that income disparity is positively correlated with financial inclusion. Income inequality rises as financial inclusion increases. Due to this, financial inclusion cannot alleviate income disparity in the chosen ASEAN member countries because it negatively affects income inequality.