Indonesia Pushes for Widespread Banking Access

Jakarta – In a bold move to bolster its economy and uplift its citizens, Indonesian President Prabowo Subianto is spearheading a national initiative to ensure every Indonesian has access to a bank account. The call to action, issued on August 4th, 2024, aims to bring millions into the formal financial system, unlocking opportunities and fostering economic growth.

Coordinating Minister for Economic Affairs,Airlangga Hartarto,stated that as of that time,approximately 80% of Indonesians already had access to banking services. “The number in several regions is good, except, for example, in North Maluku. In the future, we will encourage more people to have bank accounts so they can benefit from their accounts as well as learn the risks of investment,” he said. The initiative focuses on reaching the remaining 20%, especially those in remote areas and marginalized communities.

This push for financial inclusion has parallels to ongoing efforts in the united States. For instance, programs like Bank On, a national initiative, work to connect unbanked and underbanked individuals with safe, affordable bank accounts. according to the FDIC, in 2021, 4.5% of U.S. households were unbanked, highlighting the relevance of such initiatives even in developed economies.

The National Council for Inclusive Finance (DNKI): A Centralized Approach

To achieve its ambitious goals, the Indonesian government established the National Council for Inclusive Finance (DNKI), chaired directly by President Prabowo.The DNKI signals a top-down commitment to streamlining financial inclusion efforts across various government agencies and state-owned enterprises (BUMN).

In addition, state-owned enterprises (BUMN) have also been given the mandate to strengthen people’s financial literacy.

The DNKI’s mandate is broad, encompassing government financial services, policy formulation, and the utilization of financial information technology to ensure effective implementation. A key component is the electronic-based program for government assistance and subsidies, directly targeting low-income communities.

Thinking about a U.S. analogy, imagine if the FDIC, the Treasury Department, and the Consumer Financial Protection Bureau (CFPB) were all unified under a single council reporting directly to the President, with the explicit goal of maximizing financial inclusion. This gives a sense of the scale and centralized authority behind the DNKI.

Unifying Data for Targeted Assistance: The National Socio-Economic Single Data (DTSEN)

A cornerstone of prabowo’s strategy is the integration of national social and economic data into the National socio-Economic Single Data (DTSEN). Presidential Instruction Number 4 of 2025 paved the way for this unification, bringing together data held by various ministries and government institutions.

So far, data from several beneficiary registries has been collected. it includes data on the 10 million beneficiary families of the Family Hope Program (PKH), 18.8 million beneficiary families of the food assistance program, and 21.5 million beneficiaries of the Smart Indonesia Program (PIP). it also covers 96.8 million premium assistance recipients of the National Health Insurance (JKN),16.4 million Pre-Employment Card recipients, 40.7 million electricity subsidy recipients, and 7.05 million debtors of the Micro Credit Program (KUR).

According to Hartarto, the single identifier data can also be used in the digital payment system for the distribution of social assistance, monitoring foreign exchange traffic, and increasing tax compliance.

“DTSEN is covering the total population of indonesia, which, as of February 3, 2025, is around 285.5 million people from 93 million families,” he said.

This unified database aims to streamline the delivery of social programs and subsidies, reduce fraud, and improve overall efficiency. The DTSEN aims to paint a comprehensive picture of the Indonesian population, allowing for more targeted and effective interventions.

In the U.S., similar efforts to consolidate data across government agencies have faced significant hurdles, raising concerns about privacy, data security, and potential misuse. The Indonesian government will need to address these concerns to maintain public trust and ensure the responsible use of the DTSEN.

Reaching Underserved Communities: A Broad Target Audience

The target for financial inclusion also includes MSME actors as well as communities consisting of students, Islamic boarding school students, youth, migrant workers, people with social welfare problems, former convicts, abandoned children, women, people with disabilities, and people residing in disadvantaged, frontier, and outermost regions.

The Indonesian government recognizes that financial inclusion isn’t a one-size-fits-all solution. It requires targeted strategies to address the specific needs and challenges of diverse communities.

This focus on inclusivity reflects a global trend toward recognizing the importance of reaching marginalized populations. In the U.S., community development financial institutions (CDFIs) play a crucial role in providing financial services to underserved communities, often overlooked by traditional banks.

One potential challenge is ensuring that financial products and services are culturally appropriate and accessible to all communities. For example, offering Sharia-compliant banking products may be significant for reaching certain segments of the population.

Ambitious Targets: Aiming for Near-Universal Financial Inclusion

“With the synergy and collaboration of all ministries and agencies included in the DNKI, the level of financial inclusion in 2023 has reached 88.7 percent for account use and 76.3 percent for account ownership,” the minister noted.

“We are targeting 91 percent of account use in 2025, and 93 percent in 2029,” he added.

Indonesia’s targets are ambitious, aiming for near-universal financial inclusion within the next few years. Achieving these goals will require sustained effort,innovative solutions,and a commitment to addressing the remaining barriers to access. The Indonesian government is betting that financial inclusion will unlock economic opportunities, reduce poverty, and create a more prosperous future for all its citizens.

The success of Indonesia’s efforts could serve as a model for other developing countries seeking to expand financial inclusion and promote economic growth. However,it’s important to recognize that each country faces unique challenges and must tailor its approach to its specific context.

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