Indonesia's e-Money Transactions Growth 100 Times in 8 Years: MoF

TheIndonesia.id - Minister of Finance (Menkeu) Sri Mulyani Indrawati said Indonesia's digital economy is the largest in Southeast Asia, as reflected in the total sales value (Gross Merchandise Value / GMV) of 70 billion US dollars.

"In Indonesia, we all understand that we have tremendous potential," said Minister of Finance Sri Mulyani at the 3rd Indonesia Fintech Summit 2021 which was monitored online by Antara news agency in Jakarta, Saturday, December 11, 2021.

Research by Google, Temasek, and Bain & Company shows that digital payments will continue to grow strongly in Indonesia, with a gross transaction value in 2025 that will reach 1.2 trillion US dollars. Digital payments dominate the financial technology (fintech) industry, in addition to peer-to-peer (P2P) lending which in recent years has continued to increase, both in terms of the number of borrower accounts, lenders, and the total loan nominal.

Sri Mulyani revealed that the nominal value of electronic money or e-money transactions in Indonesia also increased more than 100 times from only IDR 2 trillion (USD 143 million) in 2012 to IDR 205 trillion (USD 14.6 billion) in 2020. "This illustrates that in less than a decade there has been an increase of 100 times. So we are not talking about single-digit linear growth. This is exponential," said Sri Mulyani.

The adoption of digital financial services and changes in the behavior of the Indonesian people continued towards the digital economy and was accelerated by the pandemic. The digital financial sector, including fintech, was clearly in a very strong position to play an increasingly important role. The government and regulators must persist to create a good digital environment with proper regulations, especially considering the potential negative impacts such as illegal online loans.

Government Spending

Sri Mulyani said the total investment in the State Revenue and Expenditure Budget (APBN) for digital infrastructure reached Rp75 trillion in 2019-2022.

"From 2019 around Rp 7 trillion (USD 500 million) increased to Rp 10 trillion (USD 714 million) in 2020. Then in 2021, it will be increased by around Rp 30 trillion (USD 2.1 billion) and 2022 to Rp 25 trillion (USD 1.8 billion)," said Sri Mulyani.

With this total budget, she hopes that all regions of Indonesia including remote areas can have Internet connections through satellite, fiber optic, to Base Transceiver Station (BTS). She targets as many as 20 thousand more villages that are still unable to connect to a reliable internet system will later be online.

"Schools, Islamic boarding schools, and various health activities such as community health centers are expected to all be connected digitally," said Sri Mulyani.

She considers connectivity is not only supporting economic transformation but also supporting transformations in the health and education sectors that are extremely important. Digital technology provides an opportunity for more democratic and equitable development. However, Sri Mulyani believes that an increasingly democratic and equitable development will not happen by itself if there are still sections of society that cannot yet access technology and the internet.