Financial Development Contribution to Economic Growth and Poverty Reduction

This study investigates the bank intermediation role (e.g., deposits, financing, and offices) contribution to enhancing Indonesian districts’ gross domestic product (GDP) and reducing poverty. The empirical results indicate that banks have applied the channeling role toward redistributing the capital from lender to borrower. Besides, a crucial role has been played in developing economics and poverty alleviation. This study contributes to economic literature practical and local government’s decision-making process through developing and testing a model of economic growth and poverty determinants. It offered new insights into the determinants of bank principles in a financial system.