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Luhut Panjaitan: Fintech to transform the national economy

Heaptalk Team, indonesia . 13 Dec 2021
Indonesia's financial inclusion

Heaptalk, Jakarta – In one decade, great challenges have hit the global economic condition, spanning the presence of the covid-19 pandemic and the competition between two superpowers, China and the United States. Indonesia has not been immune to the attack of the challenges.

Responding to the issue, the Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Panjaitan, affirmed that behind the crisis, there are opportunities. The severe condition faced by the country were capitalized into a golden moment to perform vast digital adoption (13/12). The digital transformation, further, has promoted digital economic growth to rise significantly.

Luhut in Indonesia’s Summit Fintech 2021 stated that the acceleration of digital adoption across the nation has contributed by 4% of Indonesia’s GDP. The growth of Indonesia’s digital economy, moreover, is projected to reach US$124 billion to US$146 billion in 2025.

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Main obstacles in digital financial adoption and the strategy to tackle it

According to Luhut, although the growth of digital financial adoption in Indonesia is spectacular, the phenomenon is followed by a massive obstacle, namely the lack of digital financial literacy. In 2019, Financial Services Authority (OJK) revealed the financial literacy index in Indonesia solely reached 30.03%. The number is inversely proportional to the financial inclusion index that attained 76.19%.

The gap between these two index numbers demonstrated a serious issue due to society’s financial literacy is not as comprehensive as the financial access provided. The issue should receive attention from Government to make the industry is more productive with a minimum risk.

Additionally, in his discussion concerning digital financial inclusion, Luhut highlighted that the improvement towards the sector still has to be conducted. The improvement is carried out to make Indonesia’s ability can compete in Asia’s market even more in the global market.

Embodying the notion, Luhut uttered there are great measures that must be implemented shortly. The preparation of digital and communication infrastructure, as well as the sufficient number of IT experts, are needed to be confirmed. In addition, Government should consider the policy towards digital consumer protection, as well as build an innovative ecosystem to promote the digital financial economy.