regional forum on “ emerging opportunities and challenges of financial inclusion ” talking points mr. erwin rijanto, deputy governor of bank indonesia “ financial inclusion for sme in indonesia ” kathmandu, 9 november 2016 i. introduction 1. a very good afternoon and warm greetings to : a. mr. shitangshu kumar sur chowdhury, chairman of apraca ; b. mr. shiba raj shrestha, vice chairman of apraca ; c. the member of apraca ; d. ladies and gentlemen. distinguished guests, 2. we are all aware that financial inclusion has become a priority in the world, but it has now also been considered as national agenda for indonesia. 3. in this honorable meeting, i would like to share indonesian ’ s experience regarding the financial inclusion in indonesia, and its relation to sme. ladies and gentlemen, ii. current condition in indonesia 4. considering the current condition, indonesia with its population of almost 250 million people which 28 million people living in poverty line remains to be unbanked. taking a closer look these large portion of the unbanked clustered around poverty line remains vulnerable. geographic condition adds the challenge in providing access to this target group as indonesia consist of almost 17. 000 island and most of poor people live in a very remote area with different culture. on the supply side, there are several factors inhibiting services to the community such as limited communication network and electricity infrastructure. 5. based on our survey, banked people reached 39 % in 2015. it is still in a long journey to reach the target of 75 % banked people at the end of 2019. the percentage of 39 % in our survey means they have a savings or credit account, insurance or formal means of low - cost payments. outside of 39 % still use financial services but rely on the age - old informal mechanisms : family and friends, the rotating savings club, the moneylender, the pawnbroker, cash under the mattress and long - term savings in the form of livestock. these mechanisms are incomplete, and can be very unreliable, risky and expensive. 6. interestingly, indonesia is one of the fastest - growing user smartphone in the world : nearly 60 million of the country's citizens will have smartphones in 2016. continuously, indonesia ’ s smartphone users are expected to grow at a compound annual growth rate ( cagr ) of 11. 2 % between 2016 and 2020, to reach more than 100 million and become the fourth - largest global market

implementation will also be follow - up through cooperation between bank indonesia representative offices with the local regional police. bi efforts in the strengthening of security system ladies and gentlemen, 13. we are aware that as a strategic institution, we must have a security system that can integrate and utilize both internal and external resources to ensure the smooth implementation of bank indonesia duties. at this time we continue to strengthen the security system of bank indonesia, commonly called sispambi. 14. several security efforts referred to, among others are in the form of the division of security area classification, i. e. : limited, very limited, prohibited and closed areas. we restrict access to those areas both by access rights and escort officers. gradually, we have modernized security system devices integrated with the building security. 15. related to hr, we also continue to improve their quality and skills through various training such as reskrim / intelkam ( detectives & criminal / intelligence & security ), bis central bankers ’ speeches sar, fire fighters, security for vip, and other various training which frequently conducted in cooperation with polri. expectation with the signing of the work guidelines attendees, ladies and gentlemen 16. the signing of the work guidelines today should be able to become a good communication adhesive, an intensive coordination, and also a synergic collaboration between bank indonesia and polri, specifically korbrimob, both at central level and regional levels. we also are convinced that securing bank indonesia and escorting state - owned valuables can be run more smoothly and effectively. 17. thus this speech, may allat swt be with us always, to bless and ease our step in the future. wassalamualaikum wr. wb. bis central bankers ’ speeches