Regional Disparities in Financial Protection Access in Indonesia: A Panel and Spatial Analysis

Abstract

Financial protection is essential for enhancing household resilience against economic and health shocks. However, evidence on regional disparities integrating financial inclusion and social health protection remains limited in developing countries such as Indonesia. This study addresses this gap by examining spatial–temporal disparities in financial protection across provinces and identifying their socioeconomic drivers. Using panel data from 34 Indonesian provinces (2019–2024), this study constructs a Financial Protection Index (FPI) based on insurance density and BPJS Kesehatan participation using min–max normalization. The analysis employs Global Moran’s I, LISA, and panel regression. The results reveal persistent disparities, with higher financial protection concentrated in more developed provinces. While no significant global spatial autocorrelation is observed, LISA identifies clusters of lagging regions requiring targeted intervention. Human development and income have a positive effect on financial protection, while inequality has a negative effect. Poverty shows a positive association, reflecting the expansion of public health insurance. This study contributes by integrating public and private dimensions of financial protection and applying a combined spatial–panel approach. The findings highlight the need for targeted policies to reduce regional gaps by strengthening the synergy between BPJS Kesehatan and financial inclusion initiatives.