In an effort aimed at supporting government initiatives in developing Indonesia's economy, the Financial Services Authority (Otoritas Jasa Keuangan or OJK) has prepared policies it hopes will further stimulate economic growth.

Positive Results in 2018

These were outlined by Chairman of the OJK Board of Commissioners, Wimboh Santoso at the recent Annual Financial Services Industry (PTIJK) Meeting attended by Indonesia's Vice President, Jusuf Kalla.

According to local newswires, Wimboh was keen to build on 2018's positive results explaining banking credit growth had continued its upward trend and had reached 12.9%, a significant rise from 8.24% in 2017.

The first of the policies OJK is pioneering is to significantly enlarge medium and long-term alternatives through the development of financing from the capital market.

Expanding Financial Access

By encouraging financial service institutions to increase funding contributions to priority sectors such as housing, tourism, imports and exports OJK hopes to expand financial access for MSMEs and small communities in remote areas, who have traditionally not been served by formal financial institutions.

The best way to do this is through technology. Branchless banking and micro credit distribution for example, will become more commonplace, creating more business opportunities across the archipelago.

Creativity and Innovation

But it's innovation that perhaps holds the most important key.

Indonesia is acutely aware of something called Industry 4.0, a term defined by Forbes as "the significant transformation regarding the way we produce products thanks to the digitization of manufacturing." It lends itself to creative economies the Internet of Things (IoT), smart factories and smart cities by becoming more efficient and productive and less wasteful.

This is why OJK are setting up ecosystems and encouraging financial service institutions to digitize their products and financial services by utilizing technology in business processes, both in technology-based banking supervision, and faster licensing.

The hope is to continue to strengthen banking structures by increasing economies of scale and competitiveness and banking efficiency through information technology.

Bali's Property Future

In Bali for example, plans are already in motion to provide free WiFi across the island. In a recent report by Gapura Bali, the island's tourism industry is the most obvious beneficiary of a more digital playing field but so to is the property business.

Terje Nilsen, Principal of Harcourts Seven Stones thinks better, more comprehensive Internet access "will improve transparency on land and property prices as well as rentals and that means better tax transparency, which we know is a concern of local and national governments. In addition, we think transparency will also help to increase market confidence."

OJK is an autonomous government agency charged with regulating and supervising Indonesia's financial services sector in a fair and transparent way and with the best interests of consumers and society at heart.

Sources: Tribun Bali, Forbes, Gapura Bali

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