Financial Education in Indonesia
Transcript of Financial Education in Indonesia
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FINANCIAL EDUCATION IN INDONESIAEXPERIENCES & EVALUATION
Banking Research and Regulation Directorate
2012
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Facts About Access to Finance inIndonesia and the Importance ofFinancial Education
Bank Indonesias Commitment onFinancial Education
Financial Education Experiences inIndonesia
Evaluation: Key Challenges and Success
Outline 2
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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
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Source: World Bank, 2010
83 % served
52 % served by formal institutions
61 % served
52 % served by formal institutions17 % 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
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Source: World Bank, 2010
CREDIT SAVING
60 % served
40 % underserved
68 % served
32 % underserved
Bank Semi-formal informal Dont borrow
Cant borrow
Bank Other formal informal Dont 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
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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?
Source: World Bank, 2010
Micro-insurance in Indonesia
Only 24 % Indonesian have insurance
29 % Indonesian did not have insurance because they dont
have knowledge about insurance products.
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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 formalfinancial 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 , financialliteracy becomes important and can only be acquired using financial education.
Source: World Bank, 2011
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Facts About Access to Finance inIndonesia and the Importance ofFinancial Education
Bank Indonesias Commitment onFinancial Education
Financial Education Experiences inIndonesia
Evaluation: Key Challenges and Success
Outline 9
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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
RegulationSystem
Effective andIndependentSupervisory
System
Strong
BankingIndustry
Adequate
Infrastructure
FINANCIAL STABILITY FRAMEWORK
Financial
Education is apart 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
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Consumer
protection and
financial education
Financial Educationto students andmigrant workers
Financial Planning
Saving Champaign
Financial LiteracySurvey
Financial Eligibility
Financial
Identity
Number
Intermediary
Facility
Start-up
Credit
Scheme
Distribution
Channel
Branchless
Banking
Supporting
Regulation
National
Strategy for
Financial
Inclusion
Branchless
BankingRegulation
Financial Education is also a part of Pillar 1 of Financial Inclusion
Pillar of Financial Inclusion
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Policy and
Regulation
of Financial
Inclusion
Improve Financial
Literacy
Improve PublicAcess
Financial Education Transparency on
characteristics of FinancialProduct & 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
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Outline 13
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Facts About Access to Finance inIndonesia and the Importance ofFinancial Education
Bank Indonesias Commitment onFinancial Education
Financial Education Experiences inIndonesia
Evaluation: Key Challenges and Success
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2007 : Issuance of Blueprint for Public Education in Banking
Establishment of working group on public education in banking toimplement the blueprint2008 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: TabunganKu2011 Integration of financial education in elementary and junior high school
curriculum (pilot project)
Extension of information access (enhancement of BIs website withconsumer education and information)
Financial Education for Migrant worker
Financialeducation
program forchildren and
youth
BIs Financial Education Program
PROGRAM
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National Campaign in Banking Education 15
(LETS GO TO BANK)
Introduce banks products & services with its characteristics (benefits, risks,
charges, rights & obligations) as part of financial education
promote intermediary function of banks
PURPOSES
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Integrated National Campaign Channels
in Banking Education16
Ayo ke Bank!
Public ServiceTV Commercial
Public Relation
Promotion
Websites
Signage
Uniform
Art Show Branches
Radio
Education Car
Visits ATM
News Paper
Brochures
Posters(Lets Go toThe Bank!)
Above The Line Below The Line
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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 andobligations before the customer decides to use banking products
to eliminate asymmetric information between customers and banking.
PURPOSES
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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
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TabunganKu
No monthly administration Fee
Low initial deposit (only Rp20.000/USD 1,8 for commercial banks andRp10.000/ / 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, residential
areas, 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 ofTabunganKu
As per August 2012 :
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48 kinds of brochureconcerning 6 topics
Banking institution
Customer complaintand mediation
Saving and
investation Loan
Banking services;and
Other informations,including Tips toaddress the global
financial situation
information can be seen on Bank
Indonesias website and members ofbanking education working groupswebsite
BrochuresBrochuresBrochuresBrochures
WebsitesWebsitesWebsitesWebsitesEducationEducationEducationEducation CarCarCarCar(MOBED)(MOBED)(MOBED)(MOBED)
MOBED gives education through books andinternet facilities which is available in car.
MOBED visits some places as center of publiccrowd 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
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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 aspilot
project
Introducing 72 school aspilot 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
schools 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 forpilot
project.
Implementation of Financial Education
for Elementary&Junior High School Students
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Financial Education to Migrant Workers 22
1 MIGRANT WORKERSCANDIDATE
2
3
Departure fee:- Saving
- Banks Credit
- Saving
- Remittance
- Credit payment
WORKING OVERSEAS
BACK TOINDONESIA
Small Business Loan of
Indonesian Migrant
WorkersEnterprises
Small Business Loan
Indonesia
Successful Migrant
Workers
Subject of financial educationto migrant workers
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Facts About Access to Finance inIndonesia and the Importance ofFinancial Education
Bank Indonesias Commitment onFinancial Education
Financial Education Experiences inIndonesia
Evaluation: Key Challenges and Success
Outline 23
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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
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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
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Key Success
Key success factors in implementing publiceducation in banking are:
Build the sense of ownership
Establish the commitment
Gain the endorsement
Create a single theme for a certain period
Sustainable improvements
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Building Strategic Network Among Related Institutions
Coordination by Joint Program with other stakeholders such as Ministry of
National 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 forfinancial institutions to
carry out their duties as
intermediary institutions as
well as facilitating financial
education
To do intermediaryfunction. To accelerate the processof educational activities
that directly touch the
major problems
Financial Authorities Financial Institutions NGO
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THANK YOU