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.

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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

May 7, 2026

Domestic workers work long hours and do all kind of chores for low wages and have little or no legal recourse in case of harassment or abuse, as they are completely at the mercy of their employers, or “masters” in this system of modern slavery that persists in Indonesia.

At least, that was until the House of Representatives passed the Law on Domestic Workers Protection (UU PPRT) on April 21. Among the rights and protections it guarantees, millions of domestic workers, mostly women, will gain legal status and recognition for the first time.

The Domestic Workers Protection Bill had lingered at the House for more than 22 years, indicative of a lack of enthusiasm and sense of urgency, not only on the part of legislators but also the general public. President Prabowo Subianto, in his Labor Day address last year, promised the bill would be passed within three months.

The House missed that deadline but enacted the law in time for May Day 2026 with little fanfare, to judge by the scant attention mainstream media gave the milestone legislation. Nevertheless, the new law could impact the way millions of families across the country treat their servants. And therein lies the rub.

While the law lists the various rights and obligations that must be met by all stakeholders, employers, workers and related businesses such as home cleaning services, it falls short on details related to enforcement and more importantly, oversight.

For example, the law mandates a formal employment agreement that outlines the employee’s rights and the employer’s obligations. But any negotiation between the two sides would involve an unequal power relationship and most likely result in an unfair contract for the domestic worker.

Furthermore, the law merely stipulates entitlements such as “decent wages”, “humane working hours”, “breaks and days off” and “holidays” to be determined by mutual agreement and does not set a legal framework.

It does, however, stipulate a minimum age of 18 as well as the provision of health, social and employee insurance for domestic workers. If employers register their servants for such coverage, and that is a big if, the government will contribute a share of the premium and provide social assistance.

The new law does not set a minimum wage or maximum working hours, which would be expected in a labor law.

Though it offers some protection for domestic workers, the new law also protects the interests of domestic employers. Oversight is a critical issue, and the legislation does not make clear who is responsible for contractual enforcement, provided that one is signed, or how violations will be dealt with.

Lita Anggraini, coordinator of the National Advocacy Network for Domestic Workers (Jala PRT), welcomes the new legislation but says it only covers 75 percent of the obligations covered in Convention No. 189 of the International Labor Organization.

The treaty guarantees domestic workers the same basic rights as all other employees and sets standards for fair working conditions, including reasonable working hours, weekly rest and protection from employer abuse.

Jala PRT said it received 1,184 reports on violence against domestic workers, including 26 cases of sexual violence in 2025, though it noted that many more cases of violence went unreported.

Domestic workers are typically tasked with cleaning, washing clothes, cooking, babysitting and accompanying children to and from school. In the absence of legal protection, it is not uncommon for them to be subjected to bullying, harassment and worse at the hands of employers or their family members. The way domestic workers in Indonesia are treated, with long hours, meager pay and harsh working conditions, sometimes involving abuse, their employers would be liable under antislavery laws in Western countries. But no one in Indonesia is talking about phasing out these jobs or introducing antislavery legislation.

The ILO estimates that as many as 5 million Indonesians, mostly women, are employed in domestic service. Millions also work in this sector abroad, including in Hong Kong, Malaysia, Saudi Arabia, Singapore and Taiwan. In fact, the Indonesian government has insisted on overseas employers signing contracts with specific salaries and working hours as well as legal protections in some of these countries.

Ironically, many civil society organizations that are actively demanding protections for Indonesian migrant workers abroad are less passionate about or simply turning a blind eye to legal protections for domestic workers at home.

The Domestic Workers Protection Law promises to improve the lot of domestic workers but not much beyond legal recognition. Urban Indonesians need housemaids, and want them cheap.

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