In order to raise welfare, alleviate poverty, and lower the number of unemployment, the Financial Services Authority (OJK) calls for more contribution from the financial services industry to help the government promote economic growth—a goal to be achieved by means of increasing consumer purchasing power and working towards income equality among the population.

The statement was made by OJK Chairman Muliaman D Hadad himself at the Financial Executive Gathering 2017 held at the Fairmont Hotel, Jakarta, on Friday (Jan. 13). He hoped that by maintaining the financial system's resilience and stability, poverty alleviation would no longer a mere daydream.  

"The financial services industry should be encouraged to contribute more to economic growth and income equality. To support these endeavors, the industry should maintain the financial system's resilience and stability in accordance with the established regulations," he said.

"Domestic economy should play a stronger role in order to anticipate the slow global recovery. We should also accelerate distribution of growth centers, so more people can enjoy the development's outcome. On the other hand, the financial system's resilience and stability are imperative for gaining higher trust in Indonesia's economic prospects and fundamentals," Muliaman continued.

Thus, seven strategic initiatives have been launched to give wider financial access to the public and micro, small and medium enterprises (MSME) in various areas; the initiatives constitute one of the measures for promoting economic growth. They include:

1. Optimization of the working programs drawn up together with the financial services industry, the government, and Bank Indonesia. These programs, among others, are Laku Pandai (branchless banking under financial inclusion framework), Simpel (students savings accounts), Jaring (reach, synergy and guideline), farmers and cattle insurance, fishermen insurance, guarantee for MSME loans, and financing programs implemented by other financing companies.
2. Expansion of people's business loans (KUR) program; so far most of the loans (66.8 percent) have been channeled to the trading sector and the program has been focused on debtors in the Java Island. The expansion aims to target productive sectors and areas outside Java, by involving more parties who are able to do so. 
3. Extension and utilization of the Regional Financial Access Acceleration Teams' (TPAKD) roles. Today, there are 45 TPAKDs across Indonesia, of district/city and provincial levels. This year the OJK will inaugurate 41 TPAKDs, which consist of six provincial teams and 35 district/city teams.
4. Development of financial-technology financing models to widen financial access. The OJK has issued rules that regulate peer-to-peer lending services.
5. Encouraging banks to channel credit to productive sectors and explore credit distribution to potential areas whose financial access is limited. The OJK has projected that in 2017, credit growth will range from nine to twelve percent. Some economic sectors, such as trade, processing, agricultural, and real estate industries, are expected to drive the growth.
6. Optimization of regional development banks' (BPD) roles for the purpose of regional development. For most of these banks, their credit exposure is still dominated by consumption loans.  Given that total assets of all BPDs amount to IDR 525 trillion, those banks have critical roles in driving local economic development. The OJK will push for cooperation between the BPDs and state-owned banks, and local (credit) guarantee companies, in order to build the BPDs' capacity.
7. Assigning a bigger role to the capital market as a long-term financing provider. For 2017, the OJK has targeted that 21 new issuers will undertake initial public offerings (IPO) and 60 existing issuers will raise fresh funds, with total public offering value is forecast to be higher than that of last year.               

The OJK has prepared a number of policies to support the last initiative. One of the policies is simplifying and easing public offering process by means of electronic registration, so it will be easier for companies, especially the local ones and SMEs, to obtain financing from the capital market.

Not only that, this year the OJK will initiate a financial-inclusion support program to build the public's capacity for financial and business management. The program will engage the general public, including local universities.

On the same occasion, Vice President Jusuf Kalla stated that Indonesia should be grateful, because amid the weakening global economy, national financial sector still managed to grow fairly well. But he also admitted that compared to other countries, Indonesia's economic growth was not too high, though it was not too low either.

"It takes hard work from all of us to improve the economic situation. Therefore, the OJK is expected to bring together and coordinate all financial sectors, to oversee and develop them," the Vice President added.