According to data from the Statistics Indonesia (BPS), in the last 15 years, Indonesia’s gross domestic product (GDP) per capita has continually risen. In 2000, the country’s GDP per capita stood at a mere Rp 6.78 million. Fifteen years later, it reached Rp 45.18 million. These figures show a marked increase in the income levels of Indonesian society.
However, this increase in people's income has not been accompanied by a pattern of good financial management. This is evident from a decline in people's desire to save money as a proportion of their increased income (marginal propensity to save/MPS). According to BPS data, for 11 years since 2003, the MPS value has tended to fall, while the value of the marginal propensity to consume (MPC) has tended to increase.
Compared to some other countries in the ASEAN region and surrounding areas, such as Singapore, the Philippines, and China, the savings to GDP ratio in Indonesia is small. This ratio in Singapore and China stands at 49%, while in the Philippines it stands at 46%. Indonesia lags far behind in this respect, at just 31%.
To coincide with the celebration of World Savings Day which falls annually on October 31, the OJK and financial services industry staged a campaign for the “Ayo Menabung” (Let's Save) movement. The campaign, which was officially opened by Indonesian President Joko Widodo on October 31, 2016 at the Jakarta Convention Center (JCC) in Jakarta, was aimed at improving the culture of saving in society using various financial products as well as to support national development financing.
The campaign is also a part of the implementation of Presidential Regulation of the Republic of Indonesia No. 82 of 2016 on a National Strategy for Financial Inclusion (SNKI), which was issued on September 1, 2016.
Chairman of the Board of Commissioners of the OJK Muliaman D Hadad underlined that the “Ayo Menabung” movement is not limited to saving money in banks, but also in non-bank financial industry and capital market products. This broadened meaning of "saving" represents a joint strategy between the OJK and financial services industry to further improve public access to the financial sector which, in turn, is expected to boost public prosperity.
To enliven the movement, during October 2016, the OJK and financial services industry held a series of financial inclusion activities with the slogan "Financial Inclusion for All". During this month of financial inclusion events, a remarkable 3.5 million new accounts were opened across the entire financial services industry.
This large number of new accounts were spread over several financial channels, detailed as follows: 3,388,267 third party fund accounts in banks, 12,482 insurance policies, 14,880 investment accounts in capital markets, 665 pension fund accounts, 14,321 loan accounts, and 115,862 gold savings accounts.
This movement is very urgent considering the lack of desire that people in Indonesia have for saving money. In the view of the OJK, this is influenced in part by the low level of access that Indonesians have to formal financial institutions. According to 2014 World Bank data, only 36.1% of Indonesian people had access to banks. This figure is well below that of other countries in the ASEAN region such as Thailand, Malaysia, and Singapore.
The OJK and financial services industry together with several ministries have also undertaken several other initiatives to improve public access to the formal financial sector, especially for lower-income people and those who live in areas yet to be reached by financial services institutions.
These initiatives include the Branchless Banking program known as Laku Pandai (Branchless Financial Services in the Context of Financial Inclusion). BTPN has taken up this branchless banking initiative through BTPN Wow!. This branchless financial service product for financial inclusion that officially launched in March 2015 and, as of October 2016, has 130 thousand agents with 2.1 million customers spread across Java and Sumatera.
BTPN Wow! utilizes GSM mobile phone technology with the customer's mobile phone number serving as their account number. In addition to saving money, customers can also perform a number of transactions, such as purchasing mobile phone credit, electricity top-ups, cash withdrawals, and transfers to any bank account in real time.
GSM mobile phone-based services have proved very effective, as of 60 villages surveyed in Indonesia, only 31% had a strong internet signal. Therefore, this service uses Unstructured Supplementary Service Data (USSD) with the number *247# which can operate in GSM mobile phones, even with poor signal conditions. This innovation has been key to opening up access to finance for the mass market segment. So, now there are no more reasons for not saving money. C'mon let's save! (*)