Expansion Of The Sharia Economy Becomes A Mainstay Of The Government To Increase Financial Inclusion

President Joko Widodo inaugurated a Micro Waqf Bank some time ago. (Photo: By courtesy)

JAKARTA - The government through the Coordinating Ministry for Economic Affairs is encouraging the expansion of Islamic finance, especially for young people to increase financial inclusion in society.

Assistant Deputy for Inclusive Finance and Sharia Finance Erdiriyo said this was in accordance with President Joko Widodo's direction, which targets the inclusive finance index in 2024 at 90 percent.

"The National Strategy for Financial Inclusion (SNKI) aims to accelerate and improve access to finance for all people," he said in an official statement, Wednesday, April 21.

Erdiriyo added that his party had synergized the implementation of the financial inclusion program with the Muhammadiyah Youth Central Board (PP). The role of this religious community organization is quite strategic because it has 28,159 network units and four million members.

This synergy is in line with what has been determined by the Coordinating Minister for Economic Affairs Airlangga Hartarto, who wants youth participation in expanding access to financial services. The Coordinating Minister for Airlangga considers that youth is one of the priority groups in this matter.

For information, a survey by the Financial Services Authority (OJK) in 2019 shows that Indonesia's financial inclusion index is only 76 percent. Meanwhile, the Islamic financial inclusion index is still quite low at 9.1 percent in the same year.

"With the large Muslim population in Indonesia which reaches 87 percent of the total population of 255 million, Indonesia is the country with the largest Muslim population in the world, so there is great potential to increase the Islamic financial inclusion index in Indonesia," he explained.

For this reason, Erdiriyo hopes that this large potential can be accompanied by a more coordinative synergy between policy stakeholders.

For information, the Islamic economic sector, especially banking, is projected to be one of the new sources of growth. OJK said that the performance of Islamic banking financing grew by 9.5 percent in 2020.

This is in contrast to conventional banking which recorded credit growth of minus 2.41 percent for the same period.