Financial Inclusion through Digital Financial Services and Branchless Banking: Inclusiveness, Challenges and Opportunities

Chaikal Nuryakin, Prani Sastiono, Faradina Maizar, Pyan Amin, Lili Yunita (), Nanda Puspita (), Moslem Afrizal () and Christine Tjen ()
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Lili Yunita: Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta
Nanda Puspita: Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta
Moslem Afrizal: Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta
Christine Tjen: Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta
Authors registered in the RePEc Author Service: Pyan Putro Surya Amin Muchtar

No 201708, LPEM FEBUI Working Papers from LPEM, Faculty of Economics and Business, University of Indonesia

Abstract: The initiative to enhance financial inclusion in Indonesia has been done through Financial Digital Service (LKD) by Bank Indonesia (BI) and Smart Act Branchless Banking Service for Financial Inclusion (Laku Pandai) by Financial Services Authority (OJK). There are several factors contributing to the success of both programs. One of the most important factors is the quality of the agents in charge. In order to monitor the development progress of financial inclusion brought by both programs, LPEM FEBUI conducted preliminary research through financial service agent field survey in West Nusa Tenggara and Aceh. The programs inclusiveness, challenges faced by agents, and opportunity for service expansions are three components assessed in the study. The results depicted that, despite the leap in the number of agents, both programs so far serve mainly as complimentary service. It is also found that, although agents find sufficient profitability and sustainability, there are still notable challenges in infrastructure, funding, and technical capability which need to be addressed. Such results recommend regulator, especially BI and OJK, to put more attention on the establishment of information and training center for their agents and enhancement on digital inclusion as well as electricity coverage

Keywords: Financial; Inclusion; —; LKD; —; Laku; Pandai; —; Digital; Inclusion (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2017-06, Revised 2017-06
New Economics Papers: this item is included in nep-fle, nep-pay and nep-sea
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:lpe:wpaper:201708

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