This presentation by Kusumaningtuti Soetiono was made at the second session of the 2nd OECD-GFLEC Global Research Symposium to Advance Financial Literacy on 6 November 2014, which addressed cutting-edge policy issues and research ideas to advance the global financial literacy agenda. Find out more at http://www.oecd.org/daf/fin/financial-education/oecd-infe-gflecsymposiumfinancialliteracy.htm

1. INDONESIA
FINANCIAL SERVICES
AUTHORITY
SOCIAL INEQUALITIES AND ITS CONSEQUENCES ON BUILDING FINANCIAL LITERACY STRATEGY AND PROGRAM IN INDONESIA
Presented at 2ND OECD/GFLEC GLOBAL POLICY RESEARCH SYMPOSIUM TO ADVANCE FINANCIAL LITERACY
Kusumaningtuti S. Soetiono
Member of The Board of Commissioners In Charge of Education and Consumer Protection
Indonesia Financial Services Authority
by
Paris, 6 November 2014

2. 2
INDONESIA
FINANCIAL SERVICES
AUTHORITY
SocioEconomic Indicators
Economic
Social
Gini Ratio
GDP per Capita
GDP
Unemployment Level
Education Participation Level
Poverty Level
By understanding the conditions, we can prepare financial literacy programs to cater the needs of the community
Source : National Statistic Bureau

3. 3
INDONESIA
FINANCIAL SERVICES
AUTHORITY
Financial Literacy in Indonesia
Based on Expenditure level
Based on Education Level
•The socioeconomic conditions in Indonesia, as pictured in the national financial literacy survey, shows that financial literacy is highly correlated with economic condition/wellness and education level, which is also associated with utilization level/inclusion.
•OJK responses to these conditions by preparing financial literacy program that suits the conditions and needs of the people being targeted.
A ≥ US$145.83
B US$104.17 – US$ 145.83
C US$50 – 104.17
D US$33.33 – US$50
E ≤ US$33.33

4. 4
INDONESIA
FINANCIAL SERVICES
AUTHORITY
Knowledge, Skills and Utilisation in CDE Group
•CDE Group is people with expenditure level below US$105 per month.
•CDE Group can be perceived as low income group (people living near poverty and in poverty), which comprises of approximately 46% of the population (109 million).
•Knowledge of banks dominates, whilst utilisation, as a measure of inclusion, is relatively low.
interest
Investments
Cost

5. 5
INDONESIA
FINANCIAL SERVICES
AUTHORITY
Consumption and Saving Behaviour in Indonesia
Source : World Bank
In general, people do not have proper financial management, as their tendency to spend is not in line with tendency to save.

6. 6
INDONESIA
FINANCIAL SERVICES
AUTHORITY
Access to Finance - Condition
50.21%
49.79%
Place of Living
Source : Central Bank, National Statistic Bureau, World Bank
Whilst approximately 50.21% of the population lives in rural, most of the regions are still underbanked.
People are still facing difficulties in accessing a bank office.
Traveling Time to a Bank
Rural (%)
Urban (%)
16-25
min
<10min
11-15
min
> 25
min
16-25
min
<10min
11-15
min
> 25
min

7. 7
INDONESIA
FINANCIAL SERVICES
AUTHORITY
How to Build Financial Literacy Strategy to Response Socioeconomic Inequalities
Demand Approach
Supply Approach
Financial Literacy Strategy
Stimulate more people to know and use financial product and services.
Encourage financial industries to develop financial infrastructures for selected target communities.

8. 8
INDONESIA
FINANCIAL SERVICES
AUTHORITY
Details of Financial Literacy Program to Address Inequalities
National Strategy
SocioEconomic Conditions
Programs/Activities
Programs/Activities - Demand
Programs/Activities - Supply
•Financial education for targeted communities/groups through formal education, public service announcement/commercials, strategic partnership with relevant stakeholders and outreach program.
•Providing easy access to information on financial institutions, products/service, other financial related information.
–Financial education car (and boat, expected in 2015)
–Website
–OJK Financial Consumer Services
Provision affordable and easy access for consumers to financial products/services
–Branchless banking
–Micro products and services that consist of savings, investment and protection products
–Digital Finance Services (in cooperation with the central bank as the authority for payment system)

9. 9
INDONESIA
FINANCIAL SERVICES
AUTHORITY
What are the Targets?
Pawnshop
Pension Fund
Finance Companies
Banking
Utilization
Financial Literacy

10. INDONESIA
FINANCIAL SERVICES
AUTHORITY
Thank You
Kusumaningtuti S. Soetiono
Email : kusumaningtuti.soetiono@ojk.go.id