Financial education to increase financial access
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FINANCIAL EDUCATION TO INCREASE FINANCIAL ACCESS. Mr. Y. Santoso Wibowo Directorate of Credit, Rural Bank and MSME Bank Indonesia Bali, July 2011. ACCESS TO FINANCE IN INDONESIA. 60%. 13.33%. 64.25%. Below Poverty Line. Without access to bank. Living in Rural Area. 99.91%. 60-70%.

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FINANCIAL EDUCATION TO INCREASE FINANCIAL ACCESS

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Financial education to increase financial access

FINANCIAL EDUCATION TO INCREASE FINANCIAL ACCESS

Mr. Y. Santoso Wibowo

Directorate of Credit, Rural Bank and MSME

Bank Indonesia

Bali, July 2011


Access to finance in indonesia

ACCESS TO FINANCE IN INDONESIA

60%

13.33%

64.25%

Below Poverty Line

Without access to bank

Living in Rural Area

99.91%

60-70%

MSMEs that have not been linked to bank

MSME Entrepreneur

2


Financial education to increase financial access

MSME’S PROBLEMS TO ACCESS TO FINANCE

Access to formal financial services still become constraints to majority people in Indonesia, including MSME.

Access to Financial Services

  • World Bank’s Survey shows that community who have access to formal financial services is 52%.

  • Communities who lived outside java have smaller access to financial services.

Sumber: World Bank (2009)

Community who have access to financial services

Population who don’t have access

Sumber: World Bank (2009)


Bank indonesia household survey 2010 savings

BANK INDONESIA HOUSEHOLD SURVEY 2010 : Savings

Save at Non Bank Financial Institution

3,75%

Savings38,35%

Without savings

61,65%

Save at Banks34,60%

BI’S PROGRAMS :

LET’S GO TO THE BANK

MY SAVING

4


Bi household survey 2010 credit

BI HOUSEHOLD SURVEY 2010 : Credit

Banks 18,25%

Source of loan

Rural Banks 3,14%

With loans 40,92%

MFIs 12,33%

Non Banks & Non MFIs 66,28%

Without loans 59,08%

5


Financial institution for msme

FINANCIAL INSTITUTION FOR MSME

Non

Bank

BANK

Finance both MSME and corporate

6


Gap between banks and msmes

Scale Gap

Gap between the loan size expected by banks and the loan size needed by MSMEs, especially micro enterprises

Formalization gap

Gap between bank’s requirements for formal documents, such as formal business license, property ownership, NPWP (tax number) versus the ability of MSME to fulfill the requirements.

GAP BETWEEN BANKS AND MSMEs

Information Gap

Gap of information between bank products and procedures and the MSMEs knowledge about them.

BANK

SME

7


Bi s policy in msme development

BI’S POLICY IN MSME DEVELOPMENT

The purpose of BI policy:

  • At the supply side is to increase bank’s credit to MSME

  • At the demand side is to help increase the eligibility and capability of MSME

8


Bi s policy in msme development1

BI’S POLICY IN MSME DEVELOPMENT

Research

Demand Side

Training

Information Provision

SME’s access to finance

Growth of SME/Real Sector

Cooperation with Government & Other Institutions

Regulation

Supply Side

Infrastucture development

9


Demand side policy

DEMAND SIDE POLICY

10


Training

TRAINING

The purpose of training:

  • To enhance the knowledge, capability and to encourage bank and Financial Institution for MSME to give loan to MSME

  • To enhance the knowledge and capability of Business Development Service Provider (BDSP)in order to facilitate MSME access to finance and become Bank’s partner in developing MSME through loan monitoring and evaluation.

11


Training cont d

TRAINING cont’d…

Participants of training:

  • Commercial bank and Rural bank officers

  • Officers from other Financial Institution for MSME

  • Business Development Service Providers (BDSP)

  • Government officers involved in assisting and developing MSME

12


Training cont d1

TRAINING cont’d…

Training topic

A. For Bank and Financial Institution :

  • MSME business strategy

  • Survey of MSME Potential business with Rapid Rural Appraisal (RRA) Method

  • Credit Analysis for MSME

  • How to handle non-performing loan

  • How to disburse loan to group of debtors with Self Help Group scheme

    B. For BDSP :

    Financial aspect including business feasibility (credit proposal)

13


Training cont d2

TRAINING cont’d…

Training performance (as of year 2010)

TRAINING

:

LINKAGE TO BANKS

:

14


Training cont d3

TRAINING cont’d…

Cooperation Bank Indonesia with other ministries:

Ministry of Cooperative and SME : BDSP for MSME

Ministry of Agriculture : BDSP for Farmer

Ministry of Marine Affairs and Fisheries : BDSP for

fisher men

15


Information provision

INFORMATION PROVISION

DIBI (Indonesian Data and Business Information)

www.bi.go.id

A. Purpose of DIBI

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Information provision cont d

INFORMATION PROVISION cont’d…

A. Content of DIBI

  • 1. Information for Entrepreneur :

  • priority commodity

  • funding scheme

  • MSME’s empowerment

  • bank’s service and MSME data)

  • 2. Information for Exporter :

  • export commodity profile

  • export regulation

  • export data

  • 3. Information for Banker :

  • - MSME credit report

  • - MSME credit statistic

  • - MSME data

  • 4. Information for Public :

  • regional economy study

  • real sector study

  • publication

  • bank’s service and MSME data)

  • 5. Link to other Website

17


Financial education to increase financial access

THANK YOU

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