Mobile as a Path to Greater Inclusion
Indonesia is the largest market in Southeast Asia and a member of the G20, yet it has one of the biggest underbanked populations in the world. Two hundred million Indonesians (80% of the population) are financially excluded, exposed to risk and left to manage their financial portfolios with an inefficient mix of informal services. Mobile financial services (MFS) have the potential to improve the livelihoods of millions, yet today less than 1% of Indonesian adults have registered e-wallets.
The report “Mobilizing Banking for Indonesia’s Poor,” explores the norms, values, emotions and logic that drive the financial practices of the underbanked. The perceptions of the strengths and weaknesses of the formal and informal financial services that Indonesians currently use are also examined. Building on this analysis, the report identifies gaps in the market that MFS can address by meeting consumers unmet needs and outperforming incumbent services.
The report’s authors conclude that underbanked Indonesians demand a simple one-stop shop for a suite of savings, loans, transfer, and payment services that reduce the costs with managing over a dozen financial services. The strongest stand-alone demand was for an end-of-the-day savings tool. In addition to identifying market opportunities, the report provides recommendations to service providers on how to design products that outperform incumbent financial services and expand agent networks to tap into key social influencers at the community level. Regulatory recommendations for a more enabling environment are also provided.