Coordinating Minister Luhut Says Indonesia's Financial Inclusion Is Good But Still Poor In Literacy: Far Compared To Malaysia And Singapore

JAKARTA - Coordinating Minister for Maritime Affairs and Investment Luhut B. Panjaitan assesses that the development of the financial industry in Indonesia has reached an encouraging level.

"The level of digital financial inclusion in Indonesia is already at a very good indicator," he said in an official statement, Monday, December 13 when speaking at the closing forum of The 3rd Indonesia Fintech Summit.

According to Luhut, this success is not necessarily accompanied by public understanding of the potential and risks of financial products available on the market.

"Unfortunately, the graph has not been supported by a good level of financial literacy," he said.

In fact, the retired National Armed Forces (TNI) officer compared the conditions of society and the financial industry in Indonesia with neighboring countries in the Southeast Asian Region.

"We are still very far from neighboring countries such as Singapore and Malaysia," he said.

For this reason, he encourages all policy makers and stakeholders to work together so that the national financial industry can continue to provide the best benefits for the community, especially in today's technological developments.

“Improving literacy is the key so that the level of inclusion that has occurred can have a more productive impact with minimal risk. This is our work together, between the government and associations," he said.

For information, based on data from the Financial Services Authority (OJK) in 2019, the Financial Literacy Index only reached 30.03 percent and the Financial Inclusion Index 76.19 percent. This figure is far from Singapore at 98 percent, Malaysia at 85 percent, and Thailand at 82 percent.

“The high level of inclusion with low literacy indicates such a high potential risk. Because, even though people have access to finance, they don't actually understand the functions and risks," Luhut concluded.