Sector
Finance
Indonesia’s financial sector has been flourishing over the past half decade. The COVID-19 pandemic period, while being a time of austerity for most sectors, led to revolutionary innovations in Indonesia’s financial services industry, particularly in fintech. From December 2020 to December 2022, total assets of the fintech sector grew by 48.54 percent from 2020 to 2022. This growing trend continued even after the pandemic lockdowns ended, as total assets in fintech grew by 30.8 percent from December 2022 to December 2023.
View moreOther Sectors
Finance
Indonesia’s financial sector has been flourishing over the past half decade. The COVID-19 pandemic period, while being a time of austerity for most sectors, led to revolutionary innovations in Indonesia’s financial services industry, particularly in fintech. From December 2020 to December 2022, total assets of the fintech sector grew by 48.54 percent from 2020 to 2022. This growing trend continued even after the pandemic lockdowns ended, as total assets in fintech grew by 30.8 percent from December 2022 to December 2023.
With fintech paving the way forward, traditional banking followed suit by revolutionizing its services. From 2022 to 2023, the banking industry’s fund distribution increased by 6.28 percent, source of funds increased by 6.33 percent, and total assets in the industry grew by 6.98 percent, reaching a total of US$8.22 trillion. Moreover, even regional banks have been benefitting from this wave of innovation. For the same period from 2022 to 2023, the regional banking sector saw a 7.67 percent in distributed funds, an 8.08 percent increase in source of funds, and a 7.52 percent increase in total assets, reaching a total of US$137.96 billion.
Innovations in Indonesia’s finance sector extend beyond financial services. On September 2023, the Indonesian monetary authority, Bank Indonesia (BI), introduced three pro-market monetary instruments that function as short-term fixed income securities with high coupon rates. The three instruments, SRBI, SUVBI, and SUVBI, were able to collect Rp 409 trillion (US$25.2 billion), US$2.31 billion, and US$387 million, respectively.
Particularly in the case of the SRBI, this instrument represented an innovative way to attract capital flow from abroad during a period of high credit costs and slow investment. Approximately 20.77 percent, or Rp 85.02 trillion (US$ 5.26 billion), of the total outstanding SRBI were owned by non-Indonesian residents, underscoring the SRBI’s success as a monetary instrument.
Even when compared to other countries in the same region, the Indonesian finance sector stands out for its stability against fluctuations. Throughout 2023, the global cost of credit was high due to hawkish Fed policies made to curb US inflation, resulting in a stagnation of capital flow on a global scale. Entering the second quarter of 2024, the composite index of many Southeast Asian countries such as Singapore and Thailand recorded price decreases compared to the same period last year, reaching -3.96 percent and -13.9 percent on the Straits Times Index (STI) and the Bangkok SET index, respectively. Meanwhile, the Jakarta Stock Exchange Composite Index (JKSE) recorded a price increase of 5.18 percent for the same one-year period.
In summary, the Indonesian financial sector stands out for its stability and consistency, maintaining growth through innovation even during periods of austerity or global uncertainty. This consistency is also reflected in its GDP, which grew by 7.4 percent from 2022 to 2023, contributing roughly 4.16 percent to the national GDP in 2023.
Latest News
The recent deactivation of millions of National Health Insurance (JKN) contribution assistance recipients (PBI) has been revealed as more than a mere data-cleaning exercise. It has exposed a systemic failure to recognize the vulnerability of the poor, for whom subsidized health care is a necessity, not an option. This episode underscores persistent flaws in the design and execution of Indonesia’s health protection framework.
Under Social Affairs Ministerial Decree No. 3/2026, approximately 11 million PBI participants were deactivated on Feb. 1. The PBI remains the largest segment of the JKN system; as of Dec. 31, 2025, total participation reached 282.7 million, with 40.2 percent receiving subsidies. Given its scale, this cohort is a fiscal pillar of Indonesia’s health financing, funded through both state (APBN) and regional (APBD) budgets.
The deactivation occurred because these individuals were missing from the National Integrated Socioeconomic Data (DTSEN) and were thus deemed ineligible. The DTSEN is the government’s new central welfare database, replacing the Integrated Social Welfare Data (DTKS) following 2025 instructions from Social Affairs Minister Saifullah Yusuf.
Nearly a year into this transition, the reform has left many citizens blindsided. Media reports highlight patients discovering their coverage had been terminated only while seeking treatment. The most acute disruptions affected those requiring continuous, life-sustaining care, such as dialysis patients whose treatments are strictly time-bound.
Tony Richard Samosir, chairperson of the Indonesia Dialysis Patient Community (KPCDI), said that the vast majority of dialysis patients whose PBI status was deactivated received no prior notification. He characterized this sudden termination of coverage as inhumane and a violation of fundamental human rights.
Policy-wise, the overhaul aims to ensure limited subsidies reach those most in need. The government maintains a fixed quota of 96.8 million PBI beneficiaries, targeting the poorest five deciles. Thus, removals are designed to create fiscal space for newly eligible recipients.
Yet, ground realities reveal the social cost of this administrative rationalization. Following a public backlash, Statistics Indonesia (BPS) accelerated the verification of the 11 million deactivated participants. Health Minister Budi Gunadi Sadikin also announced that coverage for patients with "catastrophic" illnesses would be automatically reactivated for three months. Of those removed, roughly 120,000 suffered from such conditions.
Even so, quota constraints and narrow exemptions risk new exclusion errors. Vulnerable citizens falling outside catastrophic classifications may still lose access despite ongoing needs. Clinical vulnerability does not always trigger administrative protection, exposing gaps between welfare metrics and real-time health dependency.
To mitigate the fallout, the government has opened reactivation pathways through local offices and encouraged enrollment as independent Class III participants. These monthly contributions are set at Rp 42,000 (US$2.48), with a Rp 7,000 subsidy leaving individuals to pay Rp 35,000. While this offers a buffer, it shifts the financial burden onto low-income households, raising concerns over affordability and continuity of care.
Compounding the problem, the universal health scheme has operated in deficit from its start, partly because many independent participants fail to pay the subsidized premiums. BPJS Watch Advocacy estimates the number of independent Class III participants in arrears exceeded 15 million in 2025.
If the government decides to raise the premiums, more people will inevitably fall into arrears and lose access to JKN services altogether.
