<p>This study investigates the unexpected sub-national consequences of financial inclusion policies on economic growth across Türkiye’s 81 provinces from 2010 to 2023. Despite a comprehensive national framework designed to leverage financial access as a primary engine for development, Türkiye exhibits a persistent West–East core-periphery divide. To evaluate this policy paradox, this paper employs a dynamic Spatial Durbin Model estimated with a bias-corrected Quasi-Maximum Likelihood estimator, accounting for significant spatial dependencies confirmed by Moran’s I and Local Indicators of Spatial Association (LISA) analyses. Financial inclusion is measured using a multidimensional index constructed for this study, with robustness ensured through three alternative index specifications and multiple spatial weighting matrices. The analysis uncovers a striking and unexpected policy outcome: contrary to the strategic intent of fostering broad-based growth, financial inclusion exerts a statistically significant and robust negative direct effect on provincial economies. This finding suggests that the push for quantity of access has inadvertently triggered a siphon effect, draining resources from lagging regions rather than invigorating them. In contrast, the model identifies significant positive spatial spillovers from regional public investment and human capital, highlighting that while the financial strategy faltered, public goods remained potent drivers of regional resilience. These results challenge the conventional wisdom, indicating that Türkiye’s financial inclusion initiatives have yielded unexpected headwinds for regional convergence, necessitating a strategic pivot from expanding access to enhancing the quality and efficiency of financial intermediation.</p>