Beyond Cash: Household Blended Finance as a Driver of Inclusive Growth in Papua
Keywords:
blended finance, household, Papua, financial inclusion, rural development, inclusive economyAbstract
Blended finance, defined as the simultaneous use of at least two financial sources—formal, semi-formal, or informal—is generally understood at the macro and institutional level, yet its practice at the micro and household level remains underexplored, particularly in underdeveloped regions such as Papua. This study analyses the determinants and impacts of household adoption of blended finance in Papua and West Papua, using data from the 2018 National Socio-Economic Survey (SUSENAS). The data are examined through logit-probit models and linear regression with interaction terms. The findings reveal that the education level of the household head increases the likelihood of accessing blended finance, while rural location significantly reduces it. Furthermore, blended finance has a significant impact on household welfare (measured by per capita expenditure) in rural areas, whereas its effect in urban areas is relatively neutral. These results indicate that blended finance in Papua operates as a grassroots community-based phenomenon, with strong potential to enhance financial inclusion and support inclusive economic growth. The study underscores the need for financial policy design that is responsive to local contexts, particularly through the strengthening of community-based institutions as the backbone of household financing ecosystems.
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