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“Before joining the preemployment program, 13 percent [of the recipients] did not have an e-wallet or access to the bank, now they do. This 13 percent amounts to around 728,000 people,” Denni said during a press briefing on Wednesday.
Financial inclusion is highly important to stabilize the Indonesian economy. Yet, a 2019 survey by the Financial Services Authority (OJK) revealed that Indonesia’s financial inclusion rate stood at only 76.1 percent, marking an increase of some 40 million unbanked adults from 2017, when the rate stood at nearly 50 percent.
Seventy-five percent of the fintech companies reported they were still facing low financial literacy among the target market, 57 percent reported facing basic infrastructure problems and 44 percent reported facing limited capital or resources challenges.
The World Bank has approved the disbursement of a $300 million loan to support the development of Indonesia's financial market, while the Asian Development Bank is helping the country cope with the COVID-19 crisis.
Indonesians have access to a wide range of fintech services without the sufficient financial literacy to take advantage of them or to protect themselves from the risks – and this could disrupt financial sector development in the country.
As much as 82.7 percent of Indonesians are aware of e-wallet platforms, while 62.4 percent are aware of digital investment and 56.7 percent are aware of pay-later services, according to the study, which involved 1,500 respondents nationwide.
