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Wooing millennials to invest in sustainable projects
A larger contribution by domestic investors will ensure that development financing is accessible and financial stability is easier to maintain in the face of global uncertainties.
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Literacy forum: Millennials participate in a talk show organized by state-owned company PT. Danareksa at Gandaria City Mall in South Jakarta on Jan. 15. The event aims to promote public literacy in finance and investment amid hyped online trading. (Antara/Courtesy of Danareksa)
F
or three years in a row, retail investors based in Indonesia have grown remarkably in number and shown an upward trend. As of July 2022, the number of retail investors in the country increased by 24.43 percent to reach 9.32 million compared with 2.5 million in 2019 and represents a sturdy signal of stronger domestic finances. Although the number has increased each year, it has great potential to develop bigger in terms of both quantity and quality.
There is room to expand in quantity by tapping the productive age, especially the youth, as potential domestic investors. The ratio of retail investors against the population of the productive ages (between 15 and 64 years old) is only 4.7 percent. Furthermore, about 60 percent of retail investors are millennials (under the age of 30).
Taking into account the demographics of the Indonesian population, which is dominated by millennials, Indonesia has great potential to increase the number of retail investors, especially from the younger generation (millennials and Gen-Z).
In quality, adequate understanding of various financial instruments, along with wise financial management and knowledge of investing, are important. Retail investors are expected not only to participate in financial markets, but also possess product knowledge and show good investment management practices, including knowledge of their rights and obligations as investors.
Financial literacy will help investors choose safe investment instruments according to their investment objectives and risk profile. Likewise, in the event of a dispute, investors are aware of protection aspects and investor complaints.
Thus, retail investors can become wise investors and build a sustainable investment culture.
A well-literate and sustainable investor holds the key in unlocking huge economic financing potentials Indonesia has outlined. Moreover, a larger contribution of domestic investors will ensure that development financing is accessible and the financial system stability is easier to maintain in the face of global uncertainties.
