In March 2020, the UNSGSA held meetings in Jakarta with leaders from the public and private sectors to discuss Indonesia’s progress toward full financial inclusion. She has visited the country three times before, in 2012, 2016 and 2018, and provided guidance as it has developed and implemented its national financial inclusion strategy (NFIS) and started to roll out digital financial services (DFS) at scale.
The Government of Indonesia has made substantial progress to increase accounts ownership through digitizing government-to-person payments. While still concentrated in urban areas, Indonesia has also seen sizeable progress in digital payments uptake, driven by innovative providers such as Gojek, Grab, Dana and LinkAja.
The UNSGSA met with Coordinating Minister for Economic Affairs Mr. Airlangga Hartarto, Minister of Home Affairs Mr. Tito Karnavian, Bank Indonesia (BI) Deputy Governor Mr. Dodi Budi Waluyo and Otoritas Jasa Keuangan (OJK) Vice Chairman Ms. Nurhaida. The leaders shared with the Special Advocate that the government is ramping up its digital payments ecosystem, while ensuring a sustainable business case. One planned initiative aims to make sure all students enrolled in school have a digital account by 2022.
BI and OJK are looking into ways to expand agent banking to rural areas. Additionally, OJK, BI and the Ministry of Home Affairs are exploring and piloting approaches around electronic know-your-customer (e-KYC) verification for both banks and non-banks, making it easier for people to get approved quickly for all types of accounts and loans.
The UNSGSA reaffirmed that she and her partners will support Indonesia’s efforts to expand agent networks and the broader DFS ecosystem in rural areas. She also noted the importance of maintaining competition in the market to avoid monopoly and drive customer centricity. Finally, she advised leaders to consider setting up a joint BI-OJK innovation office that can streamline processes for financial services providers while allowing the two financial services authorities to learn from each other.
During her visit, the UNSGSA also met with national and regional CEOs who are part of the CEOP. They discussed several promising initiatives that emerged from a CEOP Advisors Workshop held several days earlier in Jakarta. One example is a potential partnership to extend DFS to women by enabling midwives to become branchless banking and insurance agents. Given that there are about 800,000 midwives in Indonesia, each of whom serves 40–50 women per year, this initiative holds great potential to expand women’s digital financial inclusion.
UNSGSA Indonesia Country Visit Partners
Better than Cash Alliance (BTCA), Consultative Group to Assist the Poor (CGAP), Bill & Melinda Gates Foundation, World Bank Group