Financial Inclusion among the Hard Core Poverty Households: Evidence from HardCore Poverty Eradication Program (BMT) in Perlis

Abstract

The aim of this study was to evaluate the extent of financial inclusion initiatives among 315 participants in the Hard Core Poverty Eradication Program (BMT) in the state of Perlis. The data was analyzed using descriptive statistics via the Statistical Package for the Social Sciences (SPSS) and a multidimensional index approach to compute the financial inclusion index. In this study, financial inclusion was measured using the Index of Financial Inclusion (IFI), based
on two dimensions, take-up rate and responsible usage. The take-up rate dimension was assessed by examining respondents who held savings accounts, investment accounts (such as Amanah Saham Bumiputra or ASB), education savings plan accounts (SSPN), housing loans, vehicle loans, personal loans, and life insurance/takaful policies. The responsible usage dimension was evaluated by the proportion of respondents with active deposit or investment accounts and those with performing financing accounts. The IFI is a multi dimensional index that combines various aspects of financial inclusion into a single value ranging from 0 to 1, where 0 represents complete financial exclusion and 1 indicates full financial inclusion in an economy. The findings revealed that households in hard-core poverty had low levels of financial inclusion, with limited access to financial products. These households were classified as "underbanked" or "marginally banked."