financial education in indonesia - oecd wibowo pungky... · 2016-03-29 · creativemethod to...

FINANCIAL EDUCATION IN INDONESIAEXPERIENCES & EVALUATION

Banking Research and Regulation Directorate

2012

Facts About Access to Finance in Indonesia and the Importance of Financial Education

Bank Indonesia’s Commitment on Financial Education

Financial Education Experiences in Indonesia

Evaluation: Key Challenges and Success

Outline 2

1

2

3

4

• More than 13.000 islands

• Population: + 237 million

• GDP per capita Dec 2011: USD 3.542,9

• Banking industry covers + 77% of assets in financial sector

• Number of financial institutions:

• Commercial banks: 120 banks (14.820 bank offices)

• Rural banks: + 4.194

• Cooperatives: +187.598

• Microfinance institutions: +600.000 (incl. non-formal institutions)

• One bank office serves 12.096 people

Indonesia at Glance 3

4

High income

OECD and non-

OECD

92%

Central Asia &

Eastern

Europe

50%

East Asia &

Pacific

42%South Asia

22%

Middle East &

North Africa

42%

Sub-Saharan

Africa

12%Latin America and

Caribbean

40%

Source : Worldbank, Global Financial Inclusion Index 2011

INDONESIA 19.6%

MALAYSIA 66.7%

PHILIPINA 26.5%

THAILAND 77.7%

VIETNAM 21.4%

INDIA 35.2%

CHINA 63.8%

RUSIA 48.2%

BRAZIL 55.9%

INDONESIA

20%

Indonesia dibawah

rata-rata.

Only 20% of adults have account at a formal

financial institutions

Access to Finance Indonesia

5

Source: World Bank, 2010

83 % served

52 % served by formal institutions

61 % served

52 % served by formal institutions

17 % underserved 39 % underserved

NATIONALLOW-INCOME

HOUSEHOLDS

Access to Finance for Poor

• Low-income households get fewer services than others.

• Low-income household is also usually correlated with low level of education.

Bank Other formal informal Underserved Bank Other formal informal Underserved

6


CREDIT SAVING

60 % served

40 % underserved

68 % served

32 % underserved

Bank Semi-formal informal Don’t borrow

Can’t borrow

Bank Other formal informal Don’t save

Credit and Saving in Indonesia

60 % adults in Indonesia have access to

credit. But, most of them comes from

informal institutions.

68 % adults in Indonesia have access to

saving, most of them served by banks

7

1

3

4

17

29

45

0 10 20 30 40 50

Long duration

Others

Insurance product is expensive

Don't need Insurance

Have no knowledge about

product

Don't have money

%

Why Indonesian don't have insurance?


Micro-insurance in IndonesiaOnly 24 % Indonesian have insurance

29 % Indonesian did not have insurance because they don’t

have knowledge about insurance products.

8

0

10

20

30

40

50

60

70

Indonesia Lower middle income East Asia & Pacific (developing

only)

Access to FInance by Level of Education (in %)

Account at a formal

financial institution,

primary education or

less (% age 15+)

Account at a formal

financial institution,

secondary education

or more (% age 15+)

EDUCATION BOOST ACCESS TO FINANCE

Higher level of education means higher awareness to use financial products.

Since there are lack of knowledge and awareness to use financial products , financial

literacy becomes important and can only be acquired using financial education.






Outline 9

1

2

3

4

10

Stabilitas Sistem Keuangan

Pilar 6

Pilar 1 Pilar 2 Pilar 3 Pilar 4 Pilar 5 Pilar 6

Robust Consumer Protection

Sound, strong, and efficient banking system to create financial system stability for promotion of national

economic growth

Sound Banking Structure

Effective Regulation System

Effective and Independent Supervisory

System

Strong Banking Industry

Adequate Infrastructure

FINANCIAL STABILITY FRAMEWORK

Financial Education is a part of Pillar 6 of Indonesian

Banking Architenture

Financial Education on Indonesian Banking Architecture

Increasing

Financial

Education

Incresing Financial Literacy :

- Able to manage their financial better.

- Protect from engaging in unfair practices

of financial institutions.

- Self confidence to engage in financial

activities.

Increasing

customer

protection

Creating stability

in banking sector

Relationship between consumer protection and financial education

11

Consumer

protection and

financial education

Financial Education

to students and

migrant workers

Financial Planning

Saving Champaign

Financial Literacy

Survey

Financial Eligibility

Financial

Identity

Number

Intermediary

Facility

Start-up

Credit

Scheme

Distribution

Channel

Branchless

Banking

Supporting

Regulation

National

Strategy for

Financial

Inclusion

Branchless

Banking

Regulation

Financial Education is also a part of Pillar 1 of Financial Inclusion

Pillar of Financial Inclusion

12

Policy and

Regulation

of Financial

Inclusion

Improve Financial

Literacy

Improve Public

Acess

• Financial Education

• Transparency on

characteristics of Financial

Product & Services;

Robust consumer protection

Creating a credible database of

“unbanked” individuals: Financial

Identity Database

Promoting banking intermediary to

microfinance as a step stone to the

“unbanked”

Aims Of Policy and Regulation Towards Financial Inclusion

Outline 13

1

2

3

4





14

2007 :

• Issuance of Blueprint for Public Education in Banking

• Establishment of working group on public education in banking to

implement the blueprint

2008

• BI campaign programs on financial education: “Ayo ke Bank” (2008)

2009

• BI campaign programs on financial education: 3P = Whatever the

product, Remember 3 Ps : Ensure Benefits, Understand the risk,

Consider Costs”

2010

• Launching of “Indonesia Saving Campaign” and basic saving

product: TabunganKu

2011

• Integration of financial education in elementary and junior high school

curriculum (pilot project)

• Extension of information access (enhancement of BI’s website with consumer education and information)

• Financial Education for Migrant worker

Financial

education

program for

children and

youth

BI’s Financial Education Program

PROGRAM

National Campaign in Banking Education 15

(LET’S GO TO BANK)

• Introduce bank’s products & services with its characteristics (benefits, risks,

charges, rights & obligations) as part of financial education

• promote intermediary function of banks

PURPOSES

Integrated National Campaign Channels in Banking Education

16

Ayo ke Bank!

Public Service TV Commercial

Public Relation

Promotion

Websites

Signage

Uniform

Art Show Branches

Radio

Education Car

Visits ATM

News Paper

Brochures

Posters(Let’s Go to The Bank!)

Above The Line Below The Line

National Campaign Slogan of Banking Education Program 17

"Whatever the product, Remember

3 Ps : Ensure Benefits, Understand

Risks, Consider Costs“

• to educate people to understand the benefits, risks, fees and rights and

obligations before the customer decides to use banking products

• to eliminate asymmetric information between customers and banking.

PURPOSES

Indonesia Savings Movement 18

• To increase the marginal propensity to save in Indonesia

• To increase domestic funding

• To build saving culture of Indonesian peoples

Indonesia Saving Movement was launched on February 20th 2010 by the President

PURPOSES

TabunganKu

• No monthly administration Fee

• Low initial deposit (only Rp20.000/±USD 1,8 for commercial banks and Rp10.000/ /± USD 0.9 for rural banks)

• Low interest rate

TabunganKu CarTabunganKu CarTabunganKu CarTabunganKu Car

• One of service channel is TabunganKuCars. These car operates in some placesas center of public crowd such as schools,markets, office buildings, residentialareas, etc

• It was funded by banking industry

Main featuresMain featuresMain featuresMain features

Numbers of account Value (Rp Million)

2,667,897.00 2,778,576.29

Achievement of TabunganKu

As per August 2012 :

19

20

48 kinds of brochure concerning 6 topics

• Banking institution

• Customer complaint and mediation

• Saving and investation

• Loan

• Banking services; and

• Other informations, including “Tips to address the global financial situation”

information can be seen on Bank Indonesia’s website and members of banking education working group’s website

BrochuresBrochuresBrochuresBrochures

WebsitesWebsitesWebsitesWebsitesEducation Education Education Education CarCarCarCar(MOBED)(MOBED)(MOBED)(MOBED)

• MOBED gives education through books and internet facilities which is available in car.

• MOBED visits some places as center of public crowd such as schools, markets, housing complex, office buildings, etc.

• MOBED is conducted in Jakarta & surrounding areas, as well as in other 6 major cities(Medan, Bandung, Semarang, Surabaya, Denpasar & Makassar)

Channels of Banking Education Champaign

21

Preparing the academic paper

Preparing the integration and teaching strategy

of financial education in Social Science Subject.

Preparing the monitoring instrument

Preparing financial education module in

extracurricular activities.

Introducing the program in 6 provinces as pilot

project

Introducing 72 school as pilot project (first step)

Workshop on financial education module and

Training of Trainers

Financial education program in academic

year 2011-2012

Monitoring activities:

Monitoring the implementation in the

school’s partner and observe the level of

financial literacy level for students.

Steps:

a. Interviews

b. Questionnaire;.

c. Observation.

Next agenda:

a. Revision of the material

b. Involving local banks participation in

extra curriculum activities

c. Expanding school partner for pilot

project.

Implementation of Financial Education

for Elementary&Junior High School Students

Financial Education to Migrant Workers 22

1 MIGRANT WORKERS CANDIDATE

2

3

Departure fee:

- Saving

- Bank’s Credit

- Saving

- Remittance

- Credit payment

WORKING OVERSEAS

BACK TO INDONESIA

Small Business Loan of

Indonesian Migrant

WorkersEnterprises

Small Business Loan

Indonesia

Successful Migrant

Workers

Subject of financial education

to migrant workers





Outline 23

1

2

3

4

Key Challenges 24

Creative method to deliver material due difference in level

of education of target audiences

Enhance the Coordination among related institutions

to have a structured and continuous program

Budget sharing among institutions

Sutainability of campaign

Challenges

Challenges on National Strategy for Financial Education 25

Coordination among institutions is the main problem. It takes more

than a year to established The National Strategy for Financial

Inclusion, in which financial education become part of it.

Implementation of financial education for banking sector has been

referring to The Blue Print on Public Education in Banking.

However, there are problems on coordination & budget sharing

among institutions.

Review would be needed in near term to address challenges and

obstacles in implementing financial education.

DESIGN

IMPLEMENTATION

REVIEW

1

2

3

Key Success

• Key success factors in implementing public

education in banking are:

� Build the sense of ownership

� Establish the commitment

� Gain the endorsement

� Create a single theme for a certain period

� Sustainable improvements

26

Building Strategic Network Among Related Institutions

Coordination by Joint Program with other stakeholders such as Ministry ofNational Education, Ministry of Internal Affairs, Ministry of Cooperatives and SMEs,Ministry of Social Affairs is needed to expand financial access.

facilitate and build a conducive situation for financial institutions to carry out their duties as

intermediary institutions as well as facilitating financial

education

To do intermediary function.

To accelerate the process of educational activities that directly touch the

major problems

Financial Authorities Financial Institutions NGO

27

THANK YOU

financial education in indonesia - oecd wibowo pungky... · 2016-03-29 · creativemethod to...

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