SOCIAL SECURITIES SCHEME, FINANCIAL INCLUSION, AND ITS IMPACT ON POVERTY ALLEVIATION IN INDONESIA: CASE OF ZAKAT RECIPIENTS

Abstract

This study examines the impact of social security programs and financial inclusion on poverty alleviation and household consumption in Indonesia. The samples of this study are 2835 zakat recipients from 25 provinces in Indonesia. The research explores key variables, including the Family Welfare Program (Kartu Keluarga Sejahtera, KKS), Family Hope Program (Program Keluarga Harapan, PKH), Non-Cash Food Assistance (Bantuan Pangan Non-Tunai, BPNT), Social Health Insurance (ASKES), and also financial inclusion indicators such as bank account ownership, mobile phone usage, and digital payment adoption. Using ordinary least squares and probit regression analysis methods, the study revealed that PKH and BPNT have negative effects on poverty, thus, it significantly reduce poverty and enhance household consumption. In addition, financial inclusion variables, particularly mobile phone usage and digital payments, show a positive effects on consumption, suggesting the need for broader accessibility and digital literacy. The study recommends enhancing digital financial services, expanding the coverage of social protection programs as sustainable strategies to strengthen their impact on poverty alleviation and economic development.