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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.
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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
East Nusa Tenggara Governor Melki Laka Lena and East Sumba Deputy Regent Yonathan Hani signed a strategic cooperation agreement on behalf of East Nusa Tenggara and East Sumba Regency, East Nusa Tenggara, respectively, with Jakarta Special Capital Region (DKI) Governor Pramono Anung in a closed meeting held on Mar. 22, 2025.
The cooperation aims to strengthen relations between the regions in various sectors, from the overall economy to the empowerment of micro enterprises. Several important points agreed upon in the meeting include:
- Opening Up for Investment: The DKI Jakarta Government is committed to opening investment opportunities in NTT to support economic growth and regional development;
- Collaboration in Agriculture and Plantations: Increasing the productivity of East Nusa Tenggara's agricultural and plantation sectors through the use of modern technology, farmer training, and support for market access from DKI Jakarta;
- Development of Micro, Small, and Medium Enterprises: DKI Jakarta is ready to support the development of MSMEs in East Nusa Tenggara by providing capital assistance, marketing access, and increasing the capacity of business actors in East Nusa Tenggara;
- Delivery of Superior Commodities: The delivery of beef, salt, and seaweed from East Nusa Tenggara to Jakarta, which is expected to expand the market for East Nusa Tenggara livestock breeders and farmers while meeting DKI Jakarta's need for food commodities;
- Capital Participation in PT Bank Pembangunan Daerah Nusa Tenggara Timur (Bank NTT): The DKI Jakarta Government plans to provide capital participation in Bank NTT to strengthen access of East Nusa Tenggara's local communities to financing and to support the province's banking industry.
Emotional relationships also strengthen this collaboration on top of mutual economic interests. Pramono's wife Endang Nugrahani is known to actively support woven cloth craftsmen in Sikka Regency, East Nusa Tenggara, which further strengthens cultural ties between the two regions.
"We are optimistic that this collaboration will have a positive impact and open up new opportunities for the people of East Nusa Tenggara," said Yonathan.