Eye on Asia

Beyond financial inclusion: Indonesia must next take on the challenge of economic inclusion

Now Indonesia has reached its target for financial inclusion, it can focus on economic inclusion: distributing more opportunities, more equally, to more people

This requires banks, fintech players and the government to work more closely than ever before

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Indonesia’s President Joko Widodo delivers his state-of-the-nation address last August. He set the 75 per cent target for financial inclusion in 2016. Photo: AFP

William Gozali is the vice-president of investments at BRI Ventures, the corporate venture capital arm of Bank BRI, the largest microfinance institution in the world and Indonesia’s first digital bank.

Published: 11:00pm, 2 Feb 2020Updated: 3:13am, 3 Feb 2020

For the past few years, government officials and businesses in Indonesia have adopted two main courses of action to stabilise the economy: the twin clarion calls of financial and economic inclusion. Financial inclusion was talked up as a bold step in economic policy. Economic inclusion did not receive the same kind of press but is actually far more important.

Zoom out for a second. Financial inclusion is a framework aimed at communities towards the bottom of the economic pyramid (locals who earn and live on less than a few dollars per day). The idea is to give them easy access to formal financial products and services – simple things such as keeping money in a bank account, being able to digitally transfer money, borrow and get insurance.

When first introduced, the sexy idea of financial inclusion drew the attention of many businesses, government officials and academic figures.