Global Findex: Indonesia Makes the Most Progress in Helping its Unbanked Cross East Asia and the Pacific

Indonesia, 20 April 2024 – The latest Global Findex (Financial Inclusion Index) database released today by the World Bank finds that Indonesia has made the most progress, across East Asia and the Pacific, in bringing its citizens into the formal financial system in the past three years.

48.9 percent of the adults in Indonesia now own a bank account, reflecting a true turning point in the country’s journey to boost financial inclusion. This also registers a marked improvement from its 36 percentage of account ownership in 2014 and 20 percent in 2011. Between 2014 and 2017, Indonesia also saw the biggest account ownership increase of any developing economy in the East Asia and Pacific region.

Indonesia also boasts a strong use of accounts for saving, registering 10 percentage points higher than the developing world average. 42 percent of account owners save at a formal financial institution such as a bank or microfinance institution.

Gender and income equality

In Indonesia, women are five percentage points more likely than men to have an account. 51 percent of women have an account, against 46 percent of men. However, women and men are equally likely to have an active account.

Indonesia’s income gap is 20 percentage points. Among adults in the richest 60 percent of households, 57 percent have an account, versus 37 percent of those in the poorest 40 percent of households.

The digital opportunity to increase financial inclusion

With approximately 60 million unbanked adults in Indonesia using mobile phones today, there is a massive opportunity for a greater penetration for mobile payments and transactions in Indonesia.

In Indonesia, 33 percent of the unbanked cite distance as a key reason for not having an account and 69 percent of this population segment have their own mobile phone. Among account owners within the local population, 71 percent make or receive digital payments, up from 62 percent in 2014.

Millions of unbanked Indonesian adults work in the private sector and get paid in cash. As close to 20 million unbanked private wage earners in the country have a mobile phone, it is estimated that digitizing private sector wage payments could reduce its national share of unbanked adults by up to 29 percent.

Mr. Iskandar Simorangkir, Deputy Minister of Macroeconomic and Finance Coordination, as Chair of the Secretariat of the National Council for Financial Inclusion, the Republic of Indonesia, commented: “The inclusion of unbanked Indonesians has been a top priority for our country in recent years, and we are emboldened by international institutions’ recognition of our progress, raising the bar for our entire region. We are especially proud of our strides in closing the gender gap—today, women are more likely than men to have a bank account in Indonesia. We owe our success in large part to our transition to digital payments and hope that more countries will look to digitization to help citizens escape poverty, reduce social inequality, and help government be more efficient.”

The Global Findex database is the world’s most comprehensive data set on how adults save, borrow, make payments, and manage risk. Launched with funding from the Bill & Melinda Gates Foundation, the database has been published every three years since 2011. The data are collected in partnership with Gallup, Inc., through nationally representative surveys of more than 150,000 adults in over 140 economies.