Indonesia has made significant progress in improving individuals and small businesses’ access to financial services in recent years. Across different socio-economic cohorts however, access to financial services remains unequal and limited as indicated in the 2017 Global Financial Index that examines how adults save, borrow, make payments and manage financial risks. Accordingly, numerous efforts have been made to research and understand the myriad of demographic barriers and behaviours that hinder access to financial services. Focusing on how to support policymakers in improving financial services points’ availability and access in terms of proximity, Pulse Lab Jakarta partnered with the Indonesian National Council for Financial Inclusion (DNKI) to design an interactive geospatial mapping tool with the aim of charting the various financial services points across the country’s archipelago.
Prototyped using data from Yogyakarta City, Yogyakarta and Bima District, West Nusa Tenggara, the tool visualises financial services points and existing gaps based on socio-economic infrastructure and financial services offered.The idea for such a financial access map evolved out of discussions with DNKI, in which they expressed an interest in mapping financial services points (both existing and potential ones) which can aid their financial inclusion national agenda. Together with DNKI and Women’s World Banking (WWB), we explored a few ideas and fine-tuned them along the way, resulting in a prototype visualisation dashboard.
Developing the visualisation dashboard
Multiple datasets were used to develop the interactive visualisation dashboard, enabling policymakers to explore data layers and indicators that are relevant for improving financial access, and more broadly financial inclusion. These data sets range from financial and telecommunications data to geospatial and demographic data, which have been collected by Government institutions such as, Financial Services Authority (OJK), the Ministry of Communication and Information Technology, Statistics Indonesia (BPS), and National Team for the Acceleration of Poverty Reduction (TNP2K) to name a few.
At the start of the design phase, our team surveyed a variety of sources to figure out: where the financial service points are located; how long it takes for people to reach financial service points; as well as what are the factors influencing the provision of financial services in various regions. To understand the disparity in financial services provided in Indonesia, we acknowledge these are some key factors to consider.
Together with DNKI and WWB, we developed the prototype over a few months (April to November 2018) using data from Yogyakarta city and Bima district in West Nusa Tenggara, which covers 32 sub-districts and 236 kelurahan or villages. Considering that SNKI will ultimately be responsible for managing and scaling up the tool once prototyping is complete, we agreed it would be beneficial for them to take the lead in gathering the data needed for the map. PLJ and WWB thus acted as technical partners to assist with coordination.
Better granularity on financial access
By visualising the information, we sought to enhance policymakers’ analysis and decisions towards the broader objective of financial inclusion. The tool features indicators beyond the conventional measurements of financial inclusion, for instance branches per capita or ATMs per 100,000 people — which typically do not factor in where people live in relation to financial services points.
Important information related to financial service points were added and categorised into Financial Access Points (FAP) and Potential Access Points (PAP). Eight indicators were integrated for the financial access points, namely: the availability and locations of State banks, Regional banks (BPD), Private banks, Joint Venture banks, Sharia banks (BPR Syariah), Banking agents, Cooperatives and ATMs. The potential access points such as the locations of Post offices and Grapari office/TCash merchants were also included.
As availability and access to financial products and services are also influenced by other factors, the team included contextual data on socio-economic and infrastructure indicators to create data insights layers on total adult population, access points per 1000 adults, driving time from access points and network coverage. The size of the adult population and access points per 1000 adults can help policymakers understand population density in certain areas, which can then be compared to the availability of financial services to estimate inequality in access to financial services points.
We provided a data layer on network coverage, considering that one of the main challenges for financial services provision is the lack of physical infrastructure to accommodate financial services such as bank branches, ATMs and micro-finance institutions. This feature is expected to help identify potential areas that are ready (but have not yet been served) in terms of physical infrastructure to accommodate financial services.
Down to the village level
As an archipelago, Indonesia has unique challenges in terms of financial access geographical coverage, compounded by disparities between urban and rural areas. A financial access map with information down to the village level has the potential to help policymakers make informed decisions that are attuned with the context of both urban and rural areas. This is especially important if the Government is to achieve the national financial inclusion target of ensuring that 75 per cent of adult Indonesians have access to formal financial services by 2019.
We acknowledge that there are many barriers to financial inclusion, ranging from the availability of services to more complex behavioural barriers; however the map is intended to provide a better understanding of the availability of financial services and help understand potential factors hindering access to formal financial services provision — both of which can help bring financial services within closer reach for citizens and small businesses. The map is not designed to be an independent tool to illuminate issues related to access to financial services, but may complement existing research to further identify challenges related to accessing financial services in Indonesia.
The visualisation dashboard is designed with a modular orientation to accommodate additional data sets. Building the prototype, we only used data from two districts in Indonesia, which allowed us to do rapid prototyping and testing. Nevertheless to scale up the Indonesian Financial Access Map across the country, relevant data for other parts of the country will be required.
To enhance the map and its functionalities, more information can be incorporated, such as data from financial service agents, PT Pegadaian, PPOB (Payment Point Online Banks), Merchant Network and Fintech Providers. There’s also the possibility of adding other data insight layers based on poverty, unemployment, electricity infrastructure, internet signal strength, distance between branches and agents, literacy data, and gender analysis to provide extensive information on factors influencing the access and provision of financial services and products across different regions.
We were happy to hand over the prototype of the interactive geospatial financial access map to the National Council for Financial Inclusion (DNKI), where it’ll be enhanced for future usage at national-scale for more informed and timely policy making. Once ready, the map will be made available to the public. Meanwhile, check out our video below to see more features of the map.
Pulse Lab Jakarta is grateful for the generous support from the Government of Australia.