Low Level of Financial Inclusion Threatens the Indonesian Economy
Financial inclusion (or inclusive financing) is defined as the availability of financial services at affordable costs to all sections of society.
Referring to World Bank research released in 2014, Bank Indonesia Deputy Governor Sugeng said Indonesia’s financial inclusion is currently only 36 percent. Sugeng emphasized that this means only 36 percent of the adult population in Indonesia has an account at a formal financial institution, such as a bank.
Bank Indonesia and the central government of Indonesia target to raise the financial inclusion figure to 75 percent by 2019. This target is set in the National Strategy for Inclusive Finance (in Indonesian: Strategi Nasional Keuangan Inklusif, or SNKI).
According to Sugeng, the low level of financial inclusion in Indonesia cause three negative effects for the economy.
Photo courtesy of Ken Teegardin.