Financial services yet to spur economic growth in Indonesia

Monday, February 4, 2019

By Rachmadea Aisyah

The financial services sector has yet to become a main engine for economic growth, but it has the potential to do so, according to joint research from the National Development Planning Agency (Bappenas) and Parahyangan University.

While Indonesia has seen its credit productivity increase, stakeholders lack a comprehensive understanding of the sector, hence the sluggish loan disbursement in recent years, the study says.

“Indonesia is facing a huge challenge as its financial services sector is not strong enough to influence economic growth,” said Leonard VH Tampubolon, the Bappenas deputy minister for the economy, in a recent seminar in Jakarta.

“The inclusion aspect is [also of concern] as many Indonesians do not receive financial services from formal institutions.”

Photo courtesy of Ken Teegardin.

Source: The Jakarta Post (link opens in a new window)

financial inclusion