Financial Inclusion for Justice

KOMPAS/ABDULLAH FIKRI ASHRI

Rundisi (left) and Bintun, a companion to the financial inclusion program, checked data on Pegadaian gold savings customers in Pegagan Kidul Village, Kapetakan District, Cirebon Regency, West Java, on Monday (19/10/2020).

Increasing financial inclusion will accelerate recovery from the coronavirus-induced economic downturn in a sustainable and fair manner.

October is Financial Inclusion Month. This year, it is focusing on accelerating national recovery through better synergy between the ministries and financial services institutions, as Kompas reported earlier this week.

Also read: Financial Inclusion Spurs Economy

It is right to pay special attention to financial inclusion. The Covid-19 health emergency has paralyzed the nation’s economy, and Indonesia is projected to enter a recession this year. The economy must start moving immediately for the country to emerge from recession and to prevent a decline in quality of life among the majority of people, even prevent them from descending into poverty.

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The financial sector is one of the important pillars in an inclusive development. Even though it continues to grow, the financial sector is not yet inclusive and is not equally enjoyed by all. in August data from the Deposit Insurance Corporation (LPS), for example, shows that 89.6 percent of the 330,811,482 savings accounts were at banks in Jakarta. Since one person could have more than one or two accounts, it is estimated that less than half of the Indonesian population have bank accounts.

People who do not have bank accounts can access financial service through this program.

The government continues to strive to improve public access to banking through programs like Laku Pandai, especially those whom financial services have not reached. The Laku Pandai, a Financial Services Authority (OJK) program, provides banking and other financial services in collaboration with third parties and is leveraged by information technology. People who do not have bank accounts can access financial service through this program.

KOMPAS/VINA OKTAVIA

Riyan Ahmad (center), the resident initiator of saving shares in Sidorejo Village, Sidomulyo District, South Lampung, Lampung, gave a socialization about saving stocks, on Friday (15/2/2019).

In his professorship inaugral speech, Economics and Management School Dean Nunung Nuryartono of IPB University said that empirical facts showed that access to financial services increased capacity, productivity, and high resilience to economic shocks, all of which would lead to quality economic growth.

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The Covid-19 crisis has depressed the economy and pressured the lives of most Indonesians. However, the epidemic is also an opportunity to promote financial inclusion more rapidly, especially as the government has provided social assistance funds and a relief package to promote the recovery of micro, small and medium enterprises (MSMEs).

Literacy, access to services, and sustainable distribution channels are needed for financial inclusion to succeed. The people need help in learning about the available services, including online finance platforms, and channel institutions like cooperatives need strengthening and assistance. Digital financial companies as distribution channels need regulating and supervision to grow public trust. Meanwhile, network services and infrastructure must be improved in terms of reliability and must be affordable. We must not miss the opportunities that the Covid-19 crisis presents for inclusive economic recovery.