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Financial Inclusion, Financial Education, and Financial Regulation: A Story from Indonesia

Author

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  • Tambunan, Tulus

    (Asian Development Bank Institute)

Abstract

Many reforms have taken place in Indonesia following the Asian financial crisis of 1997–1998. The government has embarked upon institutional transformation, making the country one of the region’s most vibrant democracies. In social, economic, and political areas, Indonesia has seen much progress. Wide reforms have been carried out in all areas of governance, including in the financial sector, and a new development strategy has been adopted for “inclusive” economic development. This paper examines the shift in Indonesia’s national economic development strategy from its “exclusive” orientation during the New Order era before the Asian financial crisis, to its “inclusive” orientation after the crisis. It also examines the impact the reforms have had on poverty reduction and the campaign to create a better environment for micro, small, and medium-sized enterprises (MSMEs). The constraints that Indonesia faces in implementing inclusive development, particularly financial inclusion, are also discussed.

Suggested Citation

  • Tambunan, Tulus, 2015. "Financial Inclusion, Financial Education, and Financial Regulation: A Story from Indonesia," ADBI Working Papers 535, Asian Development Bank Institute.
    • Handle: RePEc:ris:adbiwp:0535
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    References listed on IDEAS

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    1. repec:ilo:ilowps:370985 is not listed on IDEAS
    2. repec:wbk:wbpubs:12254 is not listed on IDEAS
    3. Tulus Tambunan, 2008. "Trade liberalization effects on the development of small and medium-sized enterprises in Indonesia: a case study," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 15(2), pages 35-59, December.
    4. Tambunan, Tulus, 2008. "Development of Rural Manufacturing SME Clusters in a Developing Country: The Indonesian Case," Journal of Rural Development/Nongchon-Gyeongje, Korea Rural Economic Institute, vol. 31(2), pages 1-24, May.
    5. Tulus T.H. Tambunan, . "Indonesia: Building an Inclusive Development Model," Chapters, in: Zhang Yunling & Fukunari Kimura & Sothea Oum (ed.), Moving Toward A New Development Model For East Asia-The Role of Domestic Policy and Regional Cooperation, chapter 7, pages 223-254, Economic Research Institute for ASEAN and East Asia (ERIA).
    6. Siow Yue Chia & Song Hong & Stephen Howes & Paul Wyrwoll & Vo Hai Minh & Sun Xuegong & Saroj Kumar Mohanty & Tulus T.H Tambunan & Somchai Jitsuchon & Larry Strange & Chang Jae Lee & Zhang Yunling & Mi, . "Moving Toward A New Development Model For East Asia-The Role of Domestic Policy and Regional Cooperation," Books, Economic Research Institute for ASEAN and East Asia (ERIA), number 2011-rpr-10 edited by Zhang Yunling & Fukunari Kimura & Sothea Oum, July.
    7. World Bank, 2012. "The Little Data Book on Financial Inclusion 2012," World Bank Publications - Books, The World Bank Group, number 12253, December.
    8. repec:wbk:wbpubs:12252 is not listed on IDEAS
    9. Tulus T.H. Tambunan, . "Indonesia: Building an Inclusive Development Model," Chapters, in: Zhang Yunling & Fukunari Kimura & Sothea Oum (ed.), Moving Toward A New Development Model For East Asia-The Role of Domestic Policy and Regional Cooperation, chapter 8, pages 223-254, Economic Research Institute for ASEAN and East Asia (ERIA).
    10. Sachs, Ignacy., 2004. "Inclusive development strategy in an era of globalization," ILO Working Papers 993709853402676, International Labour Organization.
    11. World Bank, 2012. "The Little Data Book 2012," World Bank Publications - Books, The World Bank Group, number 12255, December.
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    Cited by:

    1. Laily Dwi Arsyianti & Salina Kassim, 2018. "Financial Prudence through Financial Education: A Conceptual Framework for Financial Inclusion الاحتراز المالي من خلال التعليم المالي: إطار مفاهيمي للإدماج المالي," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 31(1), pages 151-166, January.
    2. repec:abd:kauiea:v:31:y:2018:i:1:p:151-166 is not listed on IDEAS
    3. Fanny Salignac & Julien Hanoteau & Ioana Ramia, 2022. "Financial Resilience: A Way Forward Towards Economic Development in Developing Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 160(1), pages 1-33, February.
    4. Yoshino, Naoyuki & Morgan, Peter J., 2016. "Overview of Financial Inclusion, Regulation, and Education," ADBI Working Papers 591, Asian Development Bank Institute.
    5. Suryani, Ani Wilujeng & Helliar, Christine & Carter, Amanda J. & Medlin, John, 2018. "Shunning careers in public accounting firms: The case of Indonesia," The British Accounting Review, Elsevier, vol. 50(5), pages 463-480.
    6. Anh L.N. Ngo, 2019. "Index of Financial Inclusion and the Determinants: An Investigation in Asia," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(12), pages 1368-1382, December.

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    More about this item

    Keywords

    Financial inclusion; Bank of Indonesia; Kredit Usaha Rakyat (KUR); micro enterprises (MIEs); micro; small and medium enterprises (MSMEs);
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development

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