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BI launches pro-poor policy to help eradicate poverty
Bank Indonesia (BI) launched Wednesday a pro-poor policy to give the poor easier access to banking, insurance and other financial services
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ank Indonesia (BI) launched Wednesday a pro-poor policy to give the poor easier access to banking, insurance and other financial services.
BI Governor Darmin Nasution said the new policy would support the central bank’s financial inclusion program, which was expected to eventually eradicate poverty in Southeast Asia’s largest economy.
“The policy includes a holistic approach that aims at eliminating barriers — both in terms of prices and non-prices — for people to have access to financial services that cover savings, credit, payment system, insurance and other things,” he told a press briefing at BI offices in Jakarta.
The program, according to Darmin, will be implemented through financial education, financial eligibility, supportive regulation, facilitating intermediary and policy reform that covers customer protection, agent banking and mobile phone banking.
“[It] is designated for people who have never had access to the financial services sector,” he added.
Raising people’s ability to manage their money, Darmin said, is the main method to reduce the number of poor people as they will become aware of how to make the most of their possessions.
The program’s goal is not only to enable people to manage their money but also to increase the use of banking services (lending and savings) and insurance so that it will help eradicate poverty, he added.
“It is also aimed at widening financial access to the people, especially micro, small and medium enterprises as well as microfinance. And also to provide easier financial services to society,” Darmin
explained.
Micro, small and medium entrepreneurs (UMKMs) account for 99.91 percent of the overall businesspeople in the country. “Despite the significant contribution of UMKMs to the country’s economy, the sector still has problems in obtaining financing from the banking industry,” Darmin added.
In 2009, about 52.76 million poor people in Indonesia worked at micro, small and medium enterprises and up to 70 percent of them still had no access to banks, Central Statistics Agency (BPS) data show.
Meanwhile, a World Bank survey in the same year also revealed that about 32 percent of Indonesians are still “financially excluded”.
“If the financial services sector could function well, financial markets and institutions would be expected to give a chance to all people to take advantage of the best investment opportunities.
“Their money would be channeled to productive uses that could support economic growth, increase distribution of income and reduce poverty,” Darmin said.
BI’s new policy is in line with President Susilo Bambang Yudhoyono and his administration’s pro growth, pro job and pro poor agenda during their 2009-2014 term.
The pro-poor policy is one of 23 regulations announced by the central bank Wednesday, most of which are aimed at coping with the impact of the influx of foreign capital into the country’s debt and equity markets. (est)
