The Asian Development Bank has approved a USD 500 million loans to further promote financial inclusion in Indonesia.
The loan will help enhance access to financial services for vulnerable groups, most notably micro, small, and medium-sized enterprises (MSMEs); women; youth; and those living in rural areas, ADB said in a statement on Tuesday.
Reforms promoted under the initiative are anchored on digital infrastructure, financial technology, and private-sector collaboration, along with an enhanced regulatory framework to supervise consumer protection. Efforts to build up financial and digital financial literacy will also be intensified to promote responsible financial inclusion.
“The reforms undertaken through the subprogram will help boost living standards of low-income populations, encourage the development of MSMEs, bring in more employment opportunities, and address poverty and social inequality,” said ADB Financial Sector Specialist for Southeast Asia Poornima Jayawardana in the statement.
“The country’s efforts to achieve climate and disaster resilience and post-COVID-19 economic recovery will also be supported through this subprogram,” Jayawardana added.
ADB claims Indonesia has the fourth-largest unbanked population in the world. Close to half of its adult population does not have a formal financial account, which is considered the basic measure of financial inclusion.
Indonesia faces a lack of national and regional financial inclusion data and supporting infrastructure; limited access to finance for MSMEs and other underserved groups; and inadequate financial supervision, consumer protection, and financial literacy.
ADB said it is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while sustaining its efforts to eradicate extreme poverty.