Financial Inclusion through Digital Financial Services and Branchless Banking: Inclusiveness, Challenges and Opportunities

Chaikal Nuryakin, Prani Sastiono, Faradina Alifia Maizar, Pyan Amin, Lili Yunita, Nanda Puspita, Moslem Afrizal, and Christine Tjen


The initiative to enhance financial inclusion in Indonesia has been done through Financial Digital Service (LKD) by Bank Indonesia (BI) and Smart Act Branchless Banking Service for Financial Inclusion (Laku Pandai) by Financial Services Authority (OJK). There are several factors contributing to the success of both programs. One of the most important factors is the quality of the agents in charge. In order to monitor the development progress of financial inclusion brought by both programs, LPEM FEBUI conducted preliminary research through financial service agent field survey in West  Nusa Tenggara and Aceh. The programs inclusiveness, challenges faced by agents, and opportunity for service expansions are three components assessed in the study. The results depicted that, despite the leap in the number of agents, both programs so far serve mainly as complimentary service. It is also found that, although agents find sufficient profitability and sustainability, there are still notable challenges in infrastructure, funding, and technical capability which need to be addressed. Such results recommend regulator, especially BI and OJK, to put more attention on the establishment of information and training center for their agents and enhancement on digital inclusion as well as electricity coverage.

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