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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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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.
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The search for independence for Nahdlatul Ulama (NU),Indonesia’s largest Islamic social organization, has always been fought at its congress (Muktamar). The 35th Muktamar at Bahrul Ulum Tambakberas, Jombang, East Java, which closed on Aug. 26, was no exception.
By consensus of the nine-member Ahlul Halli wal Aqdi (AHWA), the council entrusted with selecting the NU leadership, KH Abdul Hakim Mahfudz, known as Gus Kikin, was elected chairman of the Executive Board (PBNU) for 2026-2031. He secured 472 votes, well ahead of KH Zulfa Mustofa (262) and incumbent KH Yahya Cholil Staquf (258).
On paper, it is a return to their roots. Gus Kikin is a great-grandson of NU founder Hadratussyekh KH Hasyim Asy'ari, caretaker of Tebuireng pesantren (Islamic boarding school), and former head of NU East Java. His platform was deliberately inward-looking: revitalizing NU's foundational constitution (Qanun Asasi), preserving traditional scholarly lineage and strengthening economic development for NU's tens of millions of members.
That inward turn is the point. Yahya's five-year chairmanship was defined by an outward, progressive project, continuing Abdurrahman Wahid's pluralist vision through the G20 Religion Forum and the Humanitarian Islam movement, which won praise abroad but created distance at home. His tenure was also marked by a top-down style and entanglement with the state: in 2024 he accepted a 26,000-hectare coal concession, which critics saw as a symbol of NU's co-option by the state.
That symbolism became a legal liability. In March, Yahya's brother and former religious affairs minister Yaqut Cholil Qoumas was detained over an alleged haj-quota corruption case, with a PBNU executive also implicated. Infighting over control of mining rents deepened the rift. In November, chair of the supreme board (Rais Aam) Miftachul Akhyar declared the chairmanship vacant, effectively firing Yahya, who refused to step down. NU had two rival centers of authority for two months, until Yahya apologized in January and agreed to a congress to choose his successor.
The Muktamar, then, was as much a cleansing as an election. Gus Kikin's win reflects a familiar NU divide: "conservative" here means traditionalist, sanad-oriented, pesantren-centered, deferential to senior kyai (Islamic scholar), not Islamist. Yahya represented the wing that believed NU should lead global civil discourse; Gus Kikin represents the wing that believes NU must save itself first.
The scale of that preference was confirmed elsewhere on the ballot: KH Miftachul Akhyar, the traditionalist Rais Aam who had declared Yahya's chairmanship vacant, was reelected to a second term as NU's supreme spiritual leader. Two conservatives at the top of both NU's executive and clerical hierarchies signal this was not a narrow factional win but a broad congress mandate for the traditionalist wing.
Gus Kikin’s election came with a procedural shift too: delegates replaced one-member-one-vote with AHWA selection, restoring formal authority to the ulama council over the executive branch, but also concentrating power in nine kyai, making the process easier for external patrons to influence. And patrons were present. Leading candidates had political ties, from Nasaruddin Umar, President Prabowo Subianto and Hakim to former president Joko”Jokowi” Widodo, Zulfa and Agrarian Minister Nusron Wahid, with speculation Gus Kikin had Prabowo's backing. Prabowo himself opened the congress on Aug. 27.
This is NU's perennial dilemma. Since Abdurrahnman Wahid’s 1984-1999 chairmanship established NU as an autonomous civil society voice, it has struggled to keep that independence. Both Jokowi and Prabowo have treated NU as an electoral brokerage machine, trading posts and patronage for loyalty. Prabowo's approach uses more carrots and more sticks: NU keeps its mining concession and cabinet seats, while figures like Yaqut face investigation, signaling loyalty is negotiable through legal protection.
One episode illustrates the mechanism: Yahya initially struck a mine-management deal with a firm linked to Garibaldi "Boy" Thohir (an ally of Jokowi), reportedly drawing Prabowo's disapproval; Yahya then redirected the deal to a company linked to Prabowo's brother, Hasyim Djojohadikusumo.
Gus Kikin inherits this dependency, NU cannot fully sever ties to state power, especially with ideological rivals ascendant elsewhere. So why elect a conservative? Because conservatism is NU's language of independence. Invoking the Qanun Asasi and Hasyim Asy'ari's lineage lets Gus Kikin claim distance from both political networks while still negotiating with them, a moral-economy argument that pesantren self-sufficiency (mines, hospitals, distribution networks) reduces reliance on the state.
The cost is real: NU's role as independent critic is being crowded out by its role as electoral broker. Whether NU's independence from Prabowo holds will not be settled by symbolic gestures like Prabowo's honorary NU membership card, analysts see it as a minor factor at most.
Independence, in NU's history, has never meant equidistance from power, it has meant the capacity to bargain. Gus Kikin's conservative credentials give him more room to bargain hard than Yahya's progressive brand allowed. Expect a quieter NU internationally, a more assertive NU on pesantren economics and an NU that stays inside Prabowo's tent, while demanding a bigger corner of it.
