Partnership with OJK Creates Pathways for Financial InclusionAug 11, 2016
A milestone agreement between UNDP and the Financial Services Authority (OJK) marks the first step towards harnessing the potential of financial inclusion and unlocking the potential of banking and financial services to reach the Sustainable Development Goals throughout Indonesia.
In Indonesia, only 36 per cent of adults aged 15 and above have a bank account, with 27 per cent having formal savings. Yet the ability to save and invest is an important component of poverty alleviation. It is about increasing access to financial services, especially for the working poor, who often rely on irregular, low-paid work in the informal economy.
This new UNDP-OJK partnership encourages regional banks to create initiatives that support financial inclusion. It aims to increase financial literacy and make available services that equip them to transfer funds, save and invest. These and other financial services will be tailored to the needs of the poor and will use technology to circumvent issues such as geographical remoteness
The partnership builds on the successful cooperation that exists between UNDP and the Regional Bank of Nusa Tenggara Timur (Bank NTT) to bring water to drought-affected communities in the province, thereby increasing the livelihood opportunities available to some of the poorest communities exposed to climate change-related risks. Now these communities can engage in irrigated agriculture and food processing, bringing in alternative sources of income while Bank NTT can also explore providing financial services to these previously unbanked areas.
At the signing event, UNDP Country Director Christophe Bahuet stressed that expanding financial access and financial inclusion will help reduce poverty and inequalities, increase food security, promote gender equality, and ultimately help Indonesia achieve the SDGs,”
OJK’s Chairman of the Board, Muliaman D. Hadad also encouraged all members of the private and banking sector to get behind the SDGs. “With the planned cooperation between OJK and UNDP, Indonesia is expected to see collaboration between government, private sector, development partners and other stakeholders to make a joint contribution to sustainable economic growth.”