Indonesia's Low Financial Inclusion Index, Jokowi Asks For Innovative Local Governments To Speed Up Access To Regional Finance

President Joko Widodo (Screenshot of TPAKD 2020 National Coordination Meeting)

JAKARTA - President Joko Widodo (Jokowi) appreciates the existence and hard work of the Regional Financial Access Acceleration Team (TPAKD) in expanding financial access in the regions. According to him, increasing access to finance is an important thing to encourage development and economic growth in the regions.

Not only that, said Jokowi, increasing access to finance can also promote social justice and improve the welfare and standard of living of the community. To that end, Jokowi asked local governments to accelerate financial access in their respective regions.

Moreover, Jokowi said, in the Southeast Asia region, Indonesia's financial inclusion index was only 76 percent or lower than other ASEAN countries. For that, he said extraordinary steps were needed to optimize the acceleration of access to finance.

"First, be more aggressive in increasing financial literacy, knowledge, interest, and trust in the financial industry. People understand where to get access to finance and people are starting to actively save at financial institutions," he said, in a virtual TPAKD 2020 National Coordination Meeting, Thursday, 10 December.

The former governor of DKI Jakarta said that new methods of socialization and education must be carried out through various innovative ways. Among other things, by adopting art and culture, methods that are in accordance with contemporary characters, and in accordance with the target group.

Not only that, he said, socialization and education also need to involve educational institutions, religious institutions, including cooperation with influential figures.

"Second, the TPAKD must be actively involved in encouraging the establishment of business groups, farmer groups, especially cooperatives. At the same time encouraging the way corporations are carried out by community cooperatives. Therefore, assistance and assistance to the community must be intensified," he explained.

Third, strengthening infrastructure to accelerate financial access must be more aggressive, through the establishment of Jamkrida, a microfinance institution, providing bank agents in each village to issuing regional bonds.

"This is important. And other efforts. This acceleration will not be possible if the methods are still mediocre. There must be new innovative and efficient breakthroughs," he said.

Lastly, increasing financial inclusion in passive regions, especially for the small people and UMKM. As of September 2020, it was recorded that 73.7 percent of commercial bank loans were in Java.

According to Jokowi, these four steps require hard work in innovative ways, not routine as usual. Especially when facing an economic crisis due to the COVID-19 pandemic.

"We have to take extraordinary steps to be fast, innovative so that the national economy will immediately recover and be able to rise faster than other countries," he explained.