Financial Technology in Indonesia: A Fragmented Instrument for Financial Inclusion?

  • Abstract This study aims to delve deeper into the discussion on how the financial inclusion progress in Indonesia could be affected by the growing fintech industry. We shall comprehensively discuss the current state of the platforms in the country, including the potential benefits and challenges. Such afflictions include the hugely-concentrated deposit market, to begin with and the discrepancies between regulators and the technological changes, while the high internet and mobile phone penetration are only one of the many advantages the country are endowed with. The study aims to highlight the challenges faced in increasing financial inclusion before the fintech platforms begin to flourish and how they differ to the current condition. Novel and relevant policy recommendations are also provided in the latter parts of the discussion.…
    02 Jun
    02 Jun
  • Abstract Indonesia decentralization policy is an expenditure type of decentralization. It has evolved from setting functional assignments to coordination of expenditure programs across level of governments. This study will compare type of cooperation that has taken place in three sectors of expenditure programs: (1) environmental – carbon emission mitigation programs, (2) infrastructure programs, and (3) social assistance program. We investigate challenges and opportunities of central government support that can still be salience for the sub-national and local governments involvement on those expenditure programs.…
    23 May
    23 May
  • Abstract This paper attempts to analyze economic integration of China and Southeast Asian countries. This paper adopts several methods: One, stationarity for correlation, Error Correction Model (ECM) for short-run relation and Cointegration for long-run relations. Two, Structural Vector Autoregression (SVAR) analysis to identify the cause and impact. As stock market index follows real sector performance this paper utilizes: One, elasticity analysis of economic growth between China and these countries as a proxy for real sector economic relations between them and two, descriptive statistical analysis on real effective exchange rate as well as Current Account Balance as a proxy of external economic performance between them. In correlation analysis, this paper found that one, stationarity of each country is difference at level; two, short-run economic relations (ECM) between China and these Southeast Asian countries and three, they have long-run economic relations. In causality, this paper found that China affects all of these Southeast Asian countries and no causality between Singapore and Philippines. In term of real sector analysis this paper found that, one, economic growth in China significantly affects all of these countries’ economic growth. Two, external economic performance of these countries are difference with special finding on Indonesia’s current account.…
    28 Mar
    28 Mar
  • Abstract One of the main challenges to Universal Health Coverage in developing countries like Indonesia is a high prevalence of those working in the informal sector that by the system they have to voluntarily register in the National Health Insurance System (NHIS) as Self Enroled Member. Therefore, challenges are administrative difficulties in recruiting, registering and collecting regular contribution in the most of cost-effective way. This condition hinders some individuals for being covered NHIS. This research aims to analyze qualitatively some aspects that influence the decisions of individuals or households to join NHIS in Indonesia. By conducting in-depth interviews with some of the informants who were surveyed in 2014, and some new additional informants in the three selected regions of Deli Serdang, Pandeglang, and Kupang, the study found that regional socio-economic characteristics, demographics, culture and belief systems have varying degrees of influence on individual decisions to join the NHIS. The general pattern across all the regions reveals three main factors that influence the decisions of those working in the informal sector to join the NHIS: health conditions; family and peers; and existing knowledge and experience. High-risk individuals tend to join the NHIS through interactions with health workers, family members, and friends, concerning their illnesses or health risks. These groups tend to advocate NHIS a means of reducing overall health expenses, particularly for expensive procedures. This creates an adverse selection problem and a pressing challenge for Social Security Agency for Health (SSAH) to attract healthy, young and low-risk groups in the informal…
    19 Mar
    19 Mar
  • Abstract The undergraduate admissions in Indonesia’s public universities are interestingly conducted in a two-fold system. Students are first considered for the merit-based ‘Undangan’ admissions, whereas the test-based admissions are conducted afterwards. This study aims to discuss the differences of academic performances of students entering universities through the merit-based and test-based admissions. Our discussion utilizes a comprehensive data of 5,470 freshmen admitted during the period 2001 to 2017 at the Faculty of Economics and Business of Universitas Indonesia. We observed the differences using regression and matching estimates controlling the students’ characteristics and demographics. The findings suggest that students admitted through the Undangan system perform generally better. However, such difference of academic performance diminishes across time. Furthermore, we describe the potential problems and, at the same time, progress for the country’s education system posed by the phenomenon.…
    21 Feb
    21 Feb
  • Abstract This paper aims to review Indonesia’s breakthrough on providing technical assistance under South-South Cooperation (SSC) scheme in Pacific countries. For years, Indonesia has been engaging with the main beneficiary countries: Timor Leste and Fiji. From one-off technical assistance programs, Indonesia tried to shift into more sustainable design in the form of pilot projects. By the given two case studies namely Country Partnership Strategy (CPS) Timor Leste and Gender Responsive Planning and Budgeting (GRPB) for Fiji, this article articulated Indonesia’s national interests in term of economics and political level. Both countries also represented as a part of Indonesia’s strategic way in to the South Pacific area.…
    15 Feb
    15 Feb
  • Abstract The purpose of this paper was to explore the perception of online tax filing in Indonesia using prior experience, trust, and IS (Information System) Success Model. The paper examined how the IS quality will be influenced by attributes such as prior experience on offline tax filing, trust in government, trust in technology, and trust in e-Filing website. Following this, the influence of IS quality on perceived usefulness and user satisfaction will be explored. To end the model, the paper was intended to answer question on whether the last two dimensions (perceived usefulness and user satisfaction) will have an effect on perceived net benefit. This paper used primary data generated by distributing online questionnaire and able to get the total of 1.095 respondents, 993 of which are actively using online tax-filing (e-filing) and valid. The data were analyzed by the Structured Equation Model (SEM). The results suggested that trust in government and trust in technology positively affect the trust in e-Filing website, which subsequently influence all three IS quality dimensions. Information quality, system quality and service quality was found to be consistently and significantly influence the perceived usefulness and user satisfaction. It was evident that tax payers in Indonesia placed the robustness and the safety features of the online system as the most important attributes that will influence the usefulness and satisfaction of online tax filing.…
    27 Jan
    27 Jan
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