Academic journal article The South East Asian Journal of Management

Editor's Note: Some Remarks from Alliance for Financial Inclusion (AFI) Global Forum

Academic journal article The South East Asian Journal of Management

Editor's Note: Some Remarks from Alliance for Financial Inclusion (AFI) Global Forum

Article excerpt

Dear readers,

In the end of September 2010, Bali hosted the 2010 Alliance for Financial Inclusion (AFI) global policy forum. Several prominent figures in financial system from around the world attended this event, where they can share the information regarding financial inclusion program in their countries. The contribution of financial sector is a critical point for economic growth, as addressed by World Bank (2008) in their Finance for All report. High and sustainable economic growth is proved as the most efficient tool to alleviate poverty, the multidimensional phenomenon experienced by many countries, especially the developing ones. It is our dream to expand the financial service, such as formal banking sector, so that they can also serve the group that often called "the productive poor". They often find difficulties in obtaining funds from financial institutions due to their "unbanked" characteristics (e.g. no sufficient collateral, no proper business accounting records, etc) and asymmetric information (Miller and Rojas, 2004).

Government in many developing countries proactively tries to enhance financing for these productive poor groups, which are mainly represented by the Micro, Small, and Medium Enterprises (MSMEs). In the case of Indonesia, Mr. Darmin Nasution, the governor of Central Bank of Indonesia, highlighted three programs to support financial inclusion framework: 1) People Business Credit (Kredit Usaha Rakyat - KUR), which is intended to help banking industry to prudently expand and deepen its penetration in micro-segments; 2) MySaving (TabunganKu), which aims to encourage people to open saving accounts; and 3) Financial Identity Number to give each person a unique identification number, which can ease loan application process for them. …

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