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How one bank is digitalizing financial inclusion in Indonesia

Micro and small enterprises have been a focus of financial inclusion efforts in Indonesia. Pictured here: A couple handing cash to vegetable seller at a local market outdoors

Micro and small enterprises have been a focus of financial inclusion efforts in Indonesia. Image: Unsplash/Alex Hudson

Chief Executive Officer, Bank Rakyat Indonesia (BRI)
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This article is part of: World Economic Forum Annual Meeting

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  • One of the lessons from the pandemic has been that digitalization is the future – and financial inclusion is no different.
  • But digitalizing financial inclusion presents a challenge in Indonesia, where both digital and financial literacy rates are low.
  • Here's how Indonesian bank BRI has sought to overcome some of these challenges.

While Indonesia’s access to formal financial products and services has come a long way in the last decade, Indonesia’s financial literacy index remains relatively low at less than 40% today.

Financial inclusion challenges in Indonesia

Indonesia is home to more than 60 million ultra-micro and micro businesses. They are the critical driving force of Indonesia’s economy, accounting for more than 60% of Indonesia’s GDP and absorbing a whopping 97% of the workforce. However, a lack of access to formal banking services has hindered their ability to access capital, limiting their growth potential. In a recent study by Indonesia’s Ministry of Cooperatives, more than half of surveyed ultra-micro and micro-businesses remain financially underserved. Many lack bank accounts, are in debt, and transact predominantly in cash, making it difficult for them to build a legitimate credit history that would give them access to formal funding when they need it.

Meanwhile, COVID-19 has expedited Indonesia’s uptake toward digitalization. Today, internet accessibility is close to 53% of the population. Digitalization of financial services presents an opportunity to solve financial inclusion challenges and set the foundation for inclusive and sustainable economic growth.

Indonesia has set a target to achieve 90% financial inclusion by 2024 (up from 76% today); ultra-micro and micro-businesses are the main focus of this vision.

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Closing Indonesia’s financial inclusion gap

To identify characteristics of micro customers, in 2020, BRI conducted research that gave three insights into setting a digital financial inclusion strategy (see figure 1, below).

BRI conducted research that gave three insights into setting a digital financial inclusion strategy
BRI conducted research that gave three insights into setting a digital financial inclusion strategy Image: BRI

First, customers have limited knowledge about financial products beyond a savings account.

Second, because they do not have a stable income, they are not comfortable with traditional lending products from banks.

Third, they need a financial institution that is 'locally embedded' and which can 'gain their trust'.

Ultra-micro and micro-customers' primary reason for choosing a financial institution
Ultra-micro and micro-customers' primary reason for choosing a financial institution Image: BRI

As Indonesia’s largest bank and microfinance institution, BRI is laser-focused on exploiting digitalization to champion financial inclusion through three critical initiatives: agent-based branchless banking, digital advisors, and a digital business ecosystem.

1. Agent-based branchless banking

BRI has developed BRILink Agent, an agent-based business model that allows selected customers to provide banking services, including essential savings and transactions. These agents serve customers through digital channels such as card-reading machines or mobile applications supported by the bank. BRILink Agents are the primary capital in gaining customers’ trust in the safety of their transactions. The use of digital channels made this initiative a key aspect in introducing digital financial services to those previously unfamiliar with them. By adopting digital technology to help customers transact, BRILink Agents reach communities that once had no access to financial services, especially those in remote areas.


We now have more than 500,000 BRILink Agents in more than 53,000 villages across Indonesia’s archipelago. In 2021, they conducted more than 900 million transactions, accounting for more than $81 billion in volume.

2. Digital advisors

Low financial and digital literacy expose those with a low understanding of digital financial products to fraud and identity theft. This lack of digital literacy has become the main factor behind cybersecurity concerns, further highlighting the need for not only financial but also digital education.

To date, we have mobilized more than 27,000 of our loan officers to become digital advisors who can assist and educate our customers in accessing and performing financial transactions securely through secure mobile banking apps. It is a simple, but crucial role. As we actively encourage our customers in the ultra-micro and micro-segments to use digital financial inclusion services, we must also shield them from potential fraud which may significantly impact their well-being.


How is the World Economic Forum fostering a sustainable and inclusive digital economy?

3. Digital business ecosystem

The need to conduct financial transactions digitally must be deeply embedded within customers’ daily activities to ensure its sustainability. Three pioneers of financial inclusion: Bank Rakyat Indonesia (BRI), Pegadaian, Indonesia’s largest pawn lender, and PNM – Indonesia’s largest group lender, focused on empowering women – have joined hands to create an ultra-micro ecosystem. Together, they aspire to become one of the world’s largest micro-finance institutions, bringing more than 30 million customers out of poverty over the next four years.

With more than 18,000 branches across Indonesia, this ecosystem empowers small businesses, farmers, fishermen and wet market traders to access financial services and expand their businesses. Further, the ecosystem offers a comprehensive product portfolio starting from group lending, savings and investment products. These innovations have enabled the ecosystem to serve end-to-end value chains (from production, distribution, and consumption) of eggs, sugar canes, and paddy across Java.

There are exciting opportunities ahead to achieve financial inclusion, but companies will not be able to do it without unlocking the power of digitalization. Solving this will be critical to ensure that everyone, especially those in the micro and ultra-micro segments, has an equal chance to access sustainable, comprehensive financial services to grow their businesses and achieve a better quality of life.

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