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.
2. 15 million working in the private sector received wages in cash
In Indonesia, most unbanked adults reported being paid in cash. Moving payments into a bank account or electronic money could reduce the number of unbanked adults.
The study in Afghanistan shows that digitizing wage payment made employees more likely to use the account as the main method to keep and to accumulate the money.
There is also a promising use of digital financial services in digitizing wage payments. The lion’s share of these wage earners has a mobile phone (figure 6.6).
3. 16 million use cash or OTC for domestic remittances
In Indonesia, a significant number of unbanked adults use an OTC service for sending or receiving domestic remittances (figure 6.8).
Basic Saving Account (BSA) product or registered electronic money might be attractive options to digitize domestic remittances because these products are low-cost products requiring no minimum balance. Domestic remittances could be an effective use case to increase account ownership.
The Opportunities of Digital Financial Services
Digital financial services can expand opportunities to increase financial inclusion. Mobile phone and internet amplify the possibilities to increase the number of banked adults and also to boost usage. These technologies could reduce the cost to provide financial services and eliminate the distance barriers. However, these technologies alone are not sufficient. It will take more effort to think over for the disadvantaged groups such as women, poor, elder people, and first-time users.
For more findings, you can access the 2017 Global Findex Database report.
The views expressed are exclusively my own and do not necessarily my organization and/or any of the institutions with which I am affiliated.
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