RI not to adopt financial inclusion principles from other countries

RI not to adopt financial inclusion principles from other countries

President Susilo Bambang Yudhoyono in Business 20 Summit (B20) Los Cabos, Mexico, Sunday (June 17, 2012). (ANTARA/Setpres-Abror)

"I have requested her to collaborate and to cooperate with us for our own benefit."
Jakarta (ANTARA News) - Indonesia has its own model of financial inclusion and it does not need to adopt the models of other countries, President Susilo Bambang Yudhoyono said at a press conference in Los Cabos, Mexico, on Monday (June 18).

"We have our own model of financial inclusion, thanks to the extraordinary efforts of the BRI bank and other banks, but we haven`t talked about it much with the rest of the world. Therefore, we don`t have to adopt it from any other country," he said.

Financial inclusion, also called inclusive financing, is all about providing financial services at reasonable costs to the disadvantaged and low-income segments of society.

The term "financial inclusion" has gained importance since the early 2000s, and is based on findings about financial exclusion and its link with poverty.

Financial inclusion is now a common objective of many developing nations` central banks.

Although President Yudhoyono stated that Indonesia did not need to adopt the financial inclusion principles of other countries, he said it was useful for countries to share their experiences in the field.

Therefore, the head of state specifically sought cooperation in financial inclusion from Crown Princess Maxima of the Netherlands.

"I have requested her to collaborate and to cooperate with us for our own benefit. We need to learn the best practices in order to get even better," Yudhoyono said.

Earlier, Princes Maxima praised Indonesia for paying attention to the micro, small and medium enterprises (UMKM) and also for providing business credit to poorer sections of the society as part of its financial inclusion practice.

Coordinating Minister for Economy Hatta Rajasa said Princes Maxima also asked Indonesia to "develop a good mechanism of coordination in the implementation of business credit".

However, he noted, Indonesia already had a good mechanism.

Princes Maxima, wife of Crown Prince Willem-Alexander, is the UN Secretary General Ban Ki-Moon`s Special Advocate for Inclusive Finance for Development, and is also responsible for financial development across third-world countries.

Meanwhile, President Yudhoyono said the government of Indonesia was committed to promoting financial inclusion by making it the main agenda at the G-20 Summit.

The President added that he, along with his counterparts Felipe Calderon of Mexico, Sebastian Pinera of Chile, and Princes Maxima, would encourage the world, especially G-20 member states, to adopt financial inclusion principles.

The Indonesian head of state then assured that he would make every effort to make financial inclusion the main agenda of the developing countries.

Yudhoyono noted that if the G-20 forum "discussed only the global financial system, it would merely cover big business groups and the way big banks could be managed and regulated to stabilize the world economy".

If that happens, he said, the issue regarding the small and micro enterprises` access to capital would be neglected.

"In many countries, the access of small and micro enterprises to capital is not a mainstream issue, although some of them have adopted such a system and mechanism," President Yudhoyono noted.

Since 2007, he said, Indonesia had a micro credit system backed by a government guarantee, due to which millions of micro and small businesses were able to get capital.

Meanwhile, Hatta Rajasa said the governments of Indonesia, Mexico, and Chile had signed a declaration, pertaining to financial inclusion, with a joint commitment to help poor communities have access to banks.

He added the declaration was signed by the three heads of state from Indonesia, Mexico, and Chile on Sunday evening at the G-20 Summit.

"This is an initiative by Mexican President Felipe Calderon to put financial inclusion on the G-20 agenda," Hatta Rajasa said after the signing of the declaration.

He pointed out that with the financial inclusion declaration, the governments committed themselves to not only helping poor people have greater access to banking services, but also advising them on to how to save their money in banks.

During the signing of the declaration, Hatta said, President Yudhoyono, President Felipe Calderon of Mexico and President Sebastian Pinera of Chile shared their experiences in encouraging the poorer populations in their countries to gain access to banks.

President Yudhoyono said: "To promote a culture of savings among low-income and very low-income people, be it Rp10,000 or Rp100,000, we have to open banking access for them."

The head of state also underscored the importance of having a "balanced credit allocation for big, micro, and small enterprises".

"It is unfair if more funds are channelled to big enterprises, while the micro and medium ones, who are our main economic supporters, fail to get adequate funds," the President stated.