15 April 2025

Summary

This script discusses the progress and stability of Indonesia's financial industry amid global challenges, highlighting the resilience of the country's banking system. It acknowledges the significant developments in banking, non-banking sectors, and financial literacy. Emphasis is placed on the high capital adequacy and liquidity within the banking sector, which contribute to maintaining financial stability. The script also underscores the importance of supporting small and medium enterprises (SMEs), which play a crucial role in the economy and employment, with accessible financing programs. It concludes by advocating for collaborative efforts and realistic policies to ensure continued growth and job creation.

Takeaways

• 😀 Indonesia's financial sector reflects the nation's economic progress, with advancements across various fields, including banking, non-bank financial sectors, capital markets, and financial literacy.
• 😀 Indonesia's banking sector remains resilient, especially in the face of global challenges like those in the US and Europe, thanks to strong capital adequacy exceeding 26%.
• 😀 Liquidity in Indonesia's financial system is abundant, ensuring stability despite global financial turbulence.
• 😀 Banks are encouraged to maintain vigilance, conduct stress testing, and manage their assets and liabilities with care to avoid risky practices.
• 😀 The financial sector in East Java has maintained stability, with capital adequacy and liquidity above necessary thresholds to meet public needs.
• 😀 Credit risks in East Java have been well-mitigated, supporting key economic sectors such as trade, manufacturing, and agriculture.
• 😀 The banking sector in East Java plays a crucial role in supporting the region's three largest economic sectors: trade (26.3%), manufacturing (21.1%), and agriculture (7.08%).
• 😀 As of February 2023, the distribution of credit to MSMEs in East Java reached 38.48%, surpassing the target of 25% for inclusive financing by June 2023.
• 😀 The government acknowledges the efforts of the Financial Services Authority (OJK) in stabilizing the financial services industry while emphasizing the need for accessible, fast financing programs for MSMEs.
• 😀 MSMEs are vital to Indonesia's economy, contributing significantly to employment (over 60% of total jobs) and economic growth, making it essential to support them with realistic policies and programs.

Q & A

What is the main focus of the event discussed in the transcript?

The main focus of the event is a specific work visit of Commission 11 of the Indonesian House of Representatives (DPR RI) during the 4th session of the 2022-2023 legislative period in Surabaya, East Java. The discussion highlights developments in the national financial industry and economic progress in Indonesia.

How does Indonesia's financial sector reflect the country's economic progress?

Indonesia's financial sector reflects the country's economic progress by showing advancements across various fields, including banking, non-banking sectors, capital markets, and financial literacy. These improvements indicate a growing economy and a stable financial environment.

What is the condition of Indonesia's banking system despite global financial turbulence?

Despite global financial turbulence, particularly the challenges faced by U.S. and European banks, Indonesia's banking system is in a strong position. The country's banks have high capital adequacy (above 26%) and strong liquidity, helping them withstand external shocks.

What steps are banks taking to maintain stability and avoid risks?

Banks are advised to remain vigilant by conducting stress tests, managing assets and liabilities effectively, and avoiding risky behaviors. This ensures that the financial system remains stable and resilient in the face of challenges.

How is the financial stability in East Java maintained?

The financial stability in East Java is maintained through a strong capital adequacy ratio that exceeds thresholds, adequate liquidity for meeting public needs, and well-managed credit risk. These factors help ensure a secure financial environment in the region.

Which sectors contribute the most to East Java's economy, and how does credit support these sectors?

The three largest contributing sectors to East Java's economy are trade (26.3%), manufacturing (21.1%), and agriculture (7.08%). Credit in the region supports these sectors by providing necessary funding for businesses and facilitating economic growth.

What is the current status of credit distribution for micro, small, and medium enterprises (UMKM) in East Java?

As of February 2023, credit distribution for UMKMs in East Java has reached 38.48%, exceeding the target set for inclusive financing, which aims for 25% by June 2023.

What role does the Financial Services Authority (OJK) play in maintaining financial stability?

The Financial Services Authority (OJK) plays a critical role in maintaining financial stability by overseeing and regulating the financial sector. It ensures that financial institutions adhere to standards that protect the economy and public interests.

Why is it important to support UMKM in Indonesia's economy?

Supporting UMKM is vital because they are the backbone of Indonesia's economy, contributing significantly to job creation and the national economic output. They account for over 60% of job absorption, with some estimates reaching up to 90%, making them a crucial sector for economic stability and growth.

What recommendations are made to improve UMKM access to financing?

The recommendations include providing easier and faster financing options for UMKMs, which will help more people access funds for their businesses. This would ultimately boost economic activity and job creation across Indonesia.