my personal blog
The advancement of digital payment transactions through QRIS represents a significant innovation in the realm of shopping. This modern technology allows us to conveniently make purchases without the need for cash or an ATM/credit card. With the help of our cell phones, we can effortlessly shop at various merchants that offer QRIS as a payment option, which is currently abundant in number.
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Indonesia has made significant progress in financial inclusion over the last 5 years. In 2017, the World Bank reported Indonesia had the biggest account ownership increase in the East and Asia Pacific Region between 2014 and 2017, up from 36 percent to 49 percent. Additionally, the second National Survey on Financial Literacy and Inclusion (SNLIK) that was conducted by the Financial Services Authority (OJK) in 2016 revealed that the financial inclusion indices stood at 67.82 percent. That is about 8 percentage points higher than in 2013.
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Last year, I had an opportunity to attend the workshop on Global Findex. Ms. Leora Klapper, a founder of the Global Findex Database, shared her important findings for Indonesia. Here are 3 facts that you probably didn’t know about Indonesia’s unbanked:
1. 49 percent are women
Globally, women still are less likely than men to have an account. As depicted in Figure 1.6, 72 percent of men and 65 percent of women have an account, a gender gap of 7 percentage points.
In Indonesia, the overall share of adults with an account went up from 20 percent in 2011 to 49 percent in 2017. The gender gap was pretty equal which 51 percent of women have an account, against 46 percent of men.
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“The distance to the nearest branch office is pretty far away. I can’t leave my son and my ‘warong’ for depositing money into a bank account.”
This is one of the common answers when you ask people in rural areas why they are not having a financial account. According to the latest World Bank Global Findex, a third of Indonesian unbanked adults cited physical distance was a barrier to have the account.
Number of Indonesian banked adults rose by 13 pp to 49%, the largest increase in East Asia & Pacific Region (World Bank Global Findex Database, 2017)
Indonesia is not an easy place to provide universal financial access due to geographical limitation. However, Indonesia has recently seen promising use of agent networks to reach more unbanked segments. The number of banking agents is more than 800.000.
We have seen the successful adoption of M-PESA’s agents in Kenya to boost the ownership of mobile money account. The agent is essential to find more balance between tech and touch to give people more access to the financial institution. Financial institutions should empower their agents to better serve the customer.
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