Financial inclusion is one of strategies to increase inclusive growth in a lot of countries. However it may cause either stability or instability in the financial system and the impact can be different among income group countries. Potential instability in the financial system occurs when financial inclusion causes reduction in credit standard, inceasing risk of bank reputation, and uncoresponding regulation in microfinance. Therefore, this research aimed to measure financial inclusion and financial stability indexes between countries and analyze the impact of financial inclusion on financial stability in 19 countries based on income group from 2004-2014. Data were collected from World Bank, the International Monetary Fund (IMF) database, and other sources. The methods used Sarma index to calculate financial inclusion, Albulescu and Goyeau index to calculate financial stability, and tobit model to analyze the impact of financial inclusion on financial stability. The results show higher income countries have higher financial inclusion and financial stability index than lower income countries. Financial inclusion only has positive significant effect to financial stability in high income countries. Lower and upper middle income countries have to increase availability of financial services to enhance financial inclusion. Moreover, lower and upper middle income countries have to increase financial development to enhance financial stability.

Financial inclusion is one of strategy to increase inclusive growth in Asian countries. However, it may cause either stability or instability in the financial system. Therefore, this research aimed to analyze the relationship between financial inclusion and financial stability and to analyze factors that affect the stability of the financial system in seven Asian countries in the periode of 2007-2011. The methods used are Pearson correlation and Fixed Effect Model. The results show that there is negative correlation at 5% significant level between financial inclusion and financial stability. Factors that significantly affect the financial stability are financial inclusion, financial stability in the previous period, non-FDI capital flows to GDP, the ratio of current assets to deposits and Short-term funding, and GDP per capita. Thus the increase in financial inclusion, current assets of banking, GDP per capita, and the portfolio investment can become the strategies to improve the financial stability (Bank z score) on the determined and future year.

Household debt has a significant role in influencing financial stability. This study aims to determine the impact of household characteristics and interest rates on household credits. Furthermore, determine the impact of the amount of LTV policies on interest rates on growth and potential risks of home loans and household credits. The study uses data from the Financial Services Authority (OJK), namely Financial Institution Information System, and data Household Balance Survey from 2017 to 2019. This study uses two steps: ordinary least squares (OLS) and autoregressive distributed lag (ARDL). In the OLS regression, household credit is the dependent variable, and collectability and income class are independent dummy variables. Analysis with time series regression using ARDL. The estimation results show that the increase in household credit is influenced by the characteristics of income, age, and interest rates. For household credits above quantile 0.75, interest rates do not affect the household. In the short term, loosening LTV will increase home loan growth and encourage an increase in potential credit risk. In the long term, losing LTV will increase housing loan growth and the potential threat. The study recommends using interest rates and LTV to encourage household credit, including home loans.

Household debt has a significant role in influencing financial stability. This study aims to determine the impact of household characteristics and interest rates on household credits. Furthermore, determine the impact of the amount of LTV policies on interest rates on growth and potential risks of home loans and household credits. The study uses data from the Financial Services Authority (OJK), namely Financial Institution Information System, and data Household Balance Survey from 2017 to 2019. This study uses two steps: ordinary least squares (OLS) and autoregressive distributed lag (ARDL). In the OLS regression, household credit is the dependent variable, and collectability and income class are independent dummy variables. Analysis with time series regression using ARDL. The estimation results show that the increase in household credit is influenced by the characteristics of income, age, and interest rates. For household credits above quantile 0.75, interest rates do not affect the household. In the short term, loosening LTV will increase home loan growth and encourage an increase in potential credit risk. In the long term, losing LTV will increase housing loan growth and the potential threat. The study recommends using interest rates and LTV to encourage household credit, including home loans.

In a pandemic situation, the role of financial inclusion and macroprudential policies are very important for mitigating household vulnerabilities. This study analyzes the role of financial inclusion on household consumption during the pandemic using Indonesian household data at the micro-level and analyzing differences in consumption during a pandemic and macroprudential policies loosening period. This study uses descriptive analysis and logistic regression. The study shows that households who receive formal financial services, especially access to household credit, reduce the chances of being vulnerable during a pandemic. Furthermore, increases in GDP, education, and social assistance also reduce households' chances of vulnerability.Meanwhile, the decrease in the share of consumption of housing and household facilities to total expenditure occurred after implementing the Loan to Value (LTV) tightening. The increase in the share of housing and household facilities consumption also occurred after implementing the LTV loosening. This study recommends strengthening financial inclusion to mitigate the potential vulnerability of households during economic pressure. In addition, the LTV policy can be used as one of a countercyclical instrument.