Financial Inclusion Months Hybrid Seminar

Improve the role of BPRs in supporting financial access for MSMEs and financial education in the digital era

Introduction

Promoting financial inclusion is an important agenda for accelerating growth, development, including in the contribution to achieving worker welfare and decent work in Indonesia, especially for MSMEs. In recent years, International Labour Organization (ILO) have started to engage in the development of the MSMEs sector in Indonesia. ILO view this as important work because the MSMEs take an important role in economic growth in Indonesia, contributing to around 61% of GDP growth and absorbing 97% of the total workforce. A significant improvement in expanding financial access has been achieved in the last few years. The result of the National Financial Inclusive Survey (SNKI) 2021 finds that the percentage of adults using products or services of formal financial institutions was 83.6%. Despite of these progress, SMEs and their workers still face many challenges - where access to an appropriate financial service is one of them. The SMEs is a growing business and for this purpose, they constantly need financing or other related financial product to manage their money or assets. However, SMEs are reported to still face difficulties in accessing products and services in particular from formal financial institutions.

Bank Perekonomian Rakyat (BPR/Rural Bank) are the main financial service providers in the regions. BPRs plays a significant role in serving a segment of the population who are most underserved by commercial banks and living in the rural areas. The financial inclusion gap according to SNLIK 2022 is 4.04%; the financial inclusion level in urban areas is 86.73% while in rural areas is 82.69%. The large number of BPRs in Indonesia is an advantage to accelerate financial service to SMEs and accelerate the financial inclusion, however BPR still face challenges in terms of market competition, capacity of human resources, market penetration, and digital technology adoption. In this digital era, BPR must be able to utilize the technology in order to support their business operation and improve performance. This align with the purpose from Otoritas Jasa Keuangan (OJK) where the acceleration of the digital transformation of BPR/BPRS is one of the four pillars described in the OJK's Roadmap for Development of BPR/BPRS 2021-2025.

The PROMISE 2 IMPACT is the second phase of the PROMISE IMPACT project (Promoting Small-Medium Enterprises through Improved Entrepreneurs’ Access to Financial Services) that proposes to create an enabling environment for an inclusive financial sector for SMEs, which will lead to economic growth and improved employment outcome, particularly in the post-pandemic situation whereby small and medium enterprises are severely impacted. One of the key objectives from this project is to strengthening the capacity of Financial Service Providers (Bank Perekonomian Rakyat) to serve the SMEs in productive sectors to expand their business and create employments. These objectives are achieved inter-alia through promoting digital transformation and strengthening the targeted SMEs' value chain and business ecosystem.

To commemorate Financial Inclusion Month in October, this is aligned with the Project Promise Impact concern regarding financial inclusion. In this context, the ILO is partnering with OJK KR03 and DPD Perbarindo Jateng to carry out collaborative initiatives that promote BPRs in delivering more optimal contributions to financial inclusion, particularly in terms of financing to SMEs for post-pandemic business recovery. In order to achieve this goal, we designed some specific interventions to strengthen capacities of BPRs in facing the current challenges and improve service to SMEs. This BPRs capacity building program are consisting of several key activities including Seminar/Workshop in the national financial inclusion month where we will announce few following activities with BPRs i.e Training to BPRs senior staff and management; and Support in the implementation of digital technology (BPR digital financial contest).

Objective of the Seminar/Workshop

Through this intervention we expect to improve the capacities of BPRs that impact to business sustainability and inclusive financial service offered to SMEs. ILO together with OJK and PERBARINDO will conduct a workshop as a medium to disseminate study, facilitate dialogue among related stakeholders, exchange information, sharing/learning and provide any insight to improve capacities of BPRs and contribute to financial inclusion.

With this workshop we expect to achieve some following objectives:
  • Disseminate the study: Mapping of Digital Financial Service for BPR in Indonesia
  • Ceremonial launching: Mobil Edukasi Literasi (EduLite), and Financial Literacy training for School and University Students in Central Java
  • Facilitate dialogue, discussion, and information sharing among stakeholders regarding how digital transformation could accelerate growth of BPRs and contribute to Financial Inclusion in the region.
  • Announce the 2 upcoming activities of the ILO Promise II Impact project regarding capacity building for BPR i.e., Training for BPR, and BPR digital financial contest.

Place and Date

Date : Friday, 27 October, 2023
Time : 08.30 – 15.00 WIB
Place : Hotel Santika Premiere Semarang; and will be broadcasted online through Zoom and live streaming in Youtube.

Target participants

We targeted around 175 participants from director of BPRs in central java, BPDs, Otoritas Jasa Keuangan, Bank Indonesia, Coordinating Ministry of Economic Affairs, Perbarindo, Representative of regional government, academia and development partners. One hundred participants will join via zoom and 75 participants will attend in person.

The details of participants describe as follows:
  • Financial service providers:
o PERBARINDO
o ASBANDA
o Representatives of 50 BPRs in Central Java
o Jamkrida
o BPD Bank Jateng
  • Government institutions:
o Financial Service Authority (OJK)
o Coordinating Ministry of Economic Affairs
o Ministry of Cooperatives and SMEs
o Bank Indonesia
o The Provincial Government of Central Java
  • Academia and development partners:
o DSIK (German Sparkassenstiftung for International Cooperation)
o DEFINIT Research
o UNDIP

Agenda

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