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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

September 8, 2026

Street protests have reignited the drive to pass the long-stalled asset forfeiture bill. Under renewed public pressure, the House of Representatives has committed to wrapping up deliberation by year-end, nearly two decades after the reform was first tabled. The real test now is whether this self-imposed deadline will finally overcome years of legislative foot-dragging, and whether lawmakers can be held accountable if it slips again.

The spark came on Aug. 27, when demonstrators from the Pati United People’s Alliance (AMPB) and allied civil groups rallied outside the parliamentary complex in Senayan, Jakarta. Protesters demanded the bill’s swift passage alongside harsher penalties for graft convicts, up to and including capital punishment. At the same time, the Yogyakarta Student Executive Boards Forum (BEM) held a parallel demonstration outside the city’s Presidential Palace.

Following talks with the rally leaders, House leaders pledged to finish deliberations by Dec. 15, reportedly offering to resign if they miss the target.

So far, however, the lawmakers have kept details under wraps. While Commission III noted that 13 categories of criminal offenses are being weighed for inclusion, the complete draft had not been made public by early September. Deputy House Speaker Cucun Ahmad Syamsurijal defended the secrecy, cautioning that an early release could invite public misinterpretation while talks remain fluid.

Part of the gridlock stems from the bill’s sheer scope. Rather than tweaking existing statutes, the legislation introduces an entirely novel legal mechanism to Indonesia’s legal landscape. Deputy House Speaker Sufmi Dasco noted that lawmakers are still balancing public input against the need to align the draft with the newly enacted Criminal Code (KUHP) and the Criminal Law Procedure Code (KUHAP).

Yet the hurdles are far from purely technical.

Asset forfeiture grants the state an extraordinary prerogative: seizing property suspected of illicit origins without waiting for a final criminal conviction. Granting such leverage demands rigorous evidentiary benchmarks, strict judicial oversight and reliable mechanisms for individuals and innocent third parties to challenge wrongful seizures.

These civil liberty concerns cut across party lines. Indonesian Democratic Party of Struggle (PDI-P) Secretary-General Hasto Kristiyanto reiterated his party’s backing for the bill’s anti-graft goals, but cautioned that handing sweeping powers to law enforcement without robust checks risks turning the measure into a political weapon.

Lawmaker Habiburokhman echoed that warning, arguing that the statute must not be weaponized to extort citizens, silence dissenters, or target political rivals. Taking a systemic view, Commission XIII member Rieke Diah Pitaloka urged lawmakers to build an end-to-end framework - covering asset tracing, freezing, confiscation, management and restitution - backed by transparent jurisdiction, firm judicial review and good-faith third-party protections.

Here lies the central political dilemma: The same legal muscle intended to strip corrupt elites of illicit fortunes also expands state interference with private property. The debate is no longer about whether to fight graft, but how much power the state should hold - and who gets to keep it in check.

The idea itself has been languishing since 2009, when the Financial Transaction Reports and Analysis Center (PPATK) submitted an initial draft to then-president Susilo Bambang Yudhoyono. The bill later drifted onto president Joko “Jokowi” Widodo’s National Legislation Program (Prolegnas), only to be pushed aside session after session.

The delay is striking given the broad consensus behind its core objective: Indonesia urgently needs an effective way to claw back stolen funds. According to Indonesia Corruption Watch (ICW), corruption cases between 2019 and 2023 caused Rp 234.8 trillion (roughly US$14.2 billion) in state losses, yet authorities recovered just Rp 32.8 trillion - a modest 13.9 percent.

External commitments haven't broken the domestic stalemate either. Indonesia secured full membership in the Financial Action Task Force (FATF) in October 2023, binding the nation to global standards for tracing and confiscating illicit gains. Yet international standing has done little to resolve domestic legislative hesitation.

While President Prabowo Subianto has framed asset recovery as a cornerstone of his anti-graft agenda, slow progress on the ground has kept public frustration on a boil.

Procedural caution may explain why lawmakers have taken their time, but it also raises the stakes: parliament must now prove that twenty years of deliberation yielded a watertight, abuse-proof law - not simply another excuse to delay.

The December deadline is more than a legislative marker; it is a litmus test for whether the House can turn rhetoric into reform without trading the rule of law for unchecked state authority.

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