Edy Setiadi

Edy SetiadiDeputy Commissioner - OJK

IKNBsyariah

Otoritas Jasa Keuangan

Outline

2

Poverty and Financial Access

Profile of Indonesian Sharia Finance

OJK Roles

3


GDP (Current Price)

INDONESIAN ISLAMIC FINANCE LANDSCAPE(Total Asset Compare to GDP in Billion USD)

Total Islamic Finance Industry Asset (Islamic Banking, Takaful, Islamic Finance, Islamic Stock,Islamic Mutual Fund, Sukuk (Corporate+Government)

Islamic Financial Industry Total Asset to GDP

4


Total Islamic Banking Industry AssetTotal Takaful Asset

Total Sukuk (Corporate+government) Outstanding ValueTotal Islamic Mutual Fund AuM

INDONESIAN ISLAMIC FINANCE LANDSCAPE(Million USD)

% Growth

Source: OJK (2016)

5


Indonesia Banking Industry Highlights - 2015

Islamic Banking

Conventional Banking

Indonesian Banking network

118All commercial Banks All Rural Banks

1.637

163Islamic Rural Bank

1.474Conventional Rural Bank

12Islamic Commercial Bank

22

Conventional Bank with Islamic Banking Unit

84Conventional Bank

Islamic Banking 3rd Party Funds

USD 17,1 billionIslamic Banking Financing

USD 6,7 billionIslamic Banking AssetUSD 22 billion

Indonesian BankingIndustry Asset

iB

2.747Islamic Bank Offices

22,7 millionIslamic Bank Deposit Account

Source: OJK (2016)

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Sukuk in Indonesia

711million USD Of

Outstanding Value

300million USD Mudharaba

h Aqad

411million USD

Ijarah

Aqad

Outstanding Value Accumulation Value

Outstanding Number Accumulation on Issuance

million USD

Outstanding Value Growth %

billion USD

Corporate Sukuk Sovereign Sukuk

Source: OJK (2016)

7


2 nd Period

Sharia Stock in Indonesia

1st Period

Numbers of Sharia Stock

193 billionUSD of Market

Capitalization

Shareof Sharia

Stock

57,63%In terms of

Number

53,15%In terms of

market capitalization

Note : *)

Based on Second Period of DES 2015, there are 318 stock listed (Index ISSI)

Source: OJK (2016)

8


Sharia Mutual Fund in Indonesia

92Numberof Sharia MutualFunds in 2015

AuM (Rp Billion) Growth %

Money Market

Equity

Fixed Income

MixedAsset

Others

AuM of Sharia Mutual FundOutstanding by Type

million USD

Source: OJK (2016)

Source: OJK (2016)

9


Services in Indonesia Sharia Capital Market

Sharia Online Trading SystemUnderwriter

Sharia Bank forInvestor Account Administrator

2

InvestmentManager

Custodianbank

Sharia Stock ListIssuer

4

93223

14

10


Islamic Non-Bank Industry Assetsmillion USD

Source: OJK (2016)

11


Non-Banking Industry Network (Full Fledge & Business Unit)

24Family Takaful (Life)

28General Takaful

Islamic Multifinance Companies

40

6Islamic Venture Capital

4Islamic Guarantee Companies

1

Islamic Pawn Shop

1

Indonesia ExIm Bank

12Islamic Micro Finance Institutions

(Sharia Compliant Financing)

3Retakaful

Source: OJK (2016)


Outline

12



OJK Roles

Poverty & Un-employment Rate

Year∑ of Poor People

(million)

∑ of Unemployment

(million)

2011 30,0 8,7

2012 29,1 7,3

2013 28,1 7,4

2014 28,3 7,2

2015 28, 5 7,6

Source: Statistic Indonesia (2016)

Financial Literacy Index

Sector Well Literate Sufficient Literate Less Literate Not literate

Bank 21,8% 75,44% 2,04% 0,73%

Insurance 17,8% 4,69% 0,68% 39,8%

Financing Company 9,8% 17,89% 0,21% 72,1%

Pawnshop 14,8% 38,89% 0,83% 45,44%

Capital Market3,79% 2,40% 0,03 93,79%

Source: OJK (2013)

Free from Poverty

The Poor

Education Working Capital

Small & Micro Enterpreneur

Higher Education

Life Skills

Correlation of Poverty, Financial Access and Education Access

National Task Force to Accelerate Poverty Alleviation (TNP2K)

Based on Perpres No 15 tahun 2010, TNP2K headed by Vice President of RI

•Ministry of Education & Culture, Ministry of Religious Affairs, Ministry of Finance, Ministryof Social Affairs, Ministry of Research & Higher Education, Ministry of Public Works,Ministry of Village, Development of Disadvantaged Regions & Transmigration, Ministry ofMan Power, Ministry of Health, Ministry of Marine & Fisheries, Ministry of Cooperation &Small and Medium Enterprises, Ministry of Home Affairs, Ministry of Communication &Information, Ministry of Cabinet Secretary, Ministry for national developmentplanning/BAPPENAS, Statistic Indonesia.

Member of TNP2K

•Unification of National Targeting System

•Improvement of social security health program for poor family

•Improvement of implementation and expanding “Program Keluarga Harapan”

•Integration of empowering society program to PNPM

•Financial Inclusion National Program

Programs

Objectives of Financial Access for The Poor

To Increase Income

Risk Management

Credit/Financing

Wealth Accumulation Saving Account

Insurance

• Bank• MFI• Venture Capital• Pawnshop

• Bank• MFI• Pawnshop

Insurance Company


Barriers of Financial Access

18

• Low income• Less literate• Lack of Collateral

Supply Side;derived from availability of

Services/Products

• Spatial problem• Complicated

Procedure• Limited of time

operation

Demand Side:come from Poor People

The Barriers cause poor people difficult to access financial products and services


Outline

19



OJK Roles


Master Plan of Indonesia Financial Service System/MPSJKI

20

3 Pillars of MPSJKI

Optimizing the role of financial

services industry to boost

economic

growth

Maintaining financial system stability as the foundation of

sustainable development

Optimizing the role of financial

services industry to encourage

financial independency

and equal distribution of development


OJK Inisiatives to Break the Barriers

21

National Strategy of Financial

LiteracyLaku Pandai

Pawnshop Revitalisation

JaringFarming

Insurance

Strengthening MFI

Venture Capital Revitalisation

TPAKD

Micro Insurance

Financial Inclusion


National Strategy of Financial Literacy

22

Recent Target

Not/Less Literate Society

Well Literate Society

Public education &

national champaign of

financial literacy

Strengthening financial literacy

infrastructure

Developing products and

financial services

Collaboration with stake holders

National Strategy of Financial Literacy

1stPillar

2nd Pillar

3rd Pillar


Laku Pandai/branchless Banking

23

POJK No.19/POJK.03/2014

concerning Branchless Banking

Laku Pandai provides branchless banking

services and other financial services through

agency/third party, and supported by information

technology

Simple Financial Products/Services:

1. Basic saving account

2. Micro financing/Micro Credit

3. Micro Insurance

Laku Pandai (Dec-2015)

Number of customer 1,21 million

Amount of fund (Rp) 75,4 billion

Number of agency 60.802

Number of bank 6Source: OJK (2016)


Micro Insurance

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Micro Insurance;

inisiated by OJK and insurance

industry associaton

Micro Insurance Product Specification:

SMES

• Sederhana (simple)

• Mudah (easy)

• Ekonomis (cheap)

• Segera (fast)

Some example of micro Insurance product:

• SiPeci

• SiBijak (sharia micro insurance)

• Si Abang

• Warisanku

• Stop Erupsi

• etc

Mar-15 Mar-16

Number of Participant 10.357.513 12.338.497

Gross Premium (million Rp) 244.723 152.218

Gross Claim (million Rp) 184.869 169.529

Number of Company 55 60 Source: OJK (2016)


Jaring (Jangkau, Sinergi & Guide Line)

25

JARING (Jangkau, sinergi, guide line) inisiated by OJK

and Marine & Fisheries Ministry of Republik of

Indonesia

The Objectives of JARING:

• To increase credit/financing to marine & fisheries sector

• To expand financial access of marine & fisheries community

Scope of program:

• Provides credit/financing

• saving account

• Guarantee credit services

• Insurance

Amount of credit/financing to fisheries and marine sector: Rp. 6,69 trillion (Dec 2015)


Farming Insurance: (Rice Field Insurance)

26

Insured Farmers Group ( POKTAN ) consisting of farmers who carry out farming activities as a whole risks (risk anyone) .

Object of Insurance Paddy fields cultivated by farmers

Insurer State-owned enterprises

Insurance Policy Each POKTAN receives an insurance policy. Its policy contains data overview closure

Period of Insurance One growing season ( four months ) starting from planting to harvesting

Sum Insured Rp 6.000.000,-/Ha (an area of approximately 1 ha calculated proportionally).

Insurance Premium Rates

Rp 180.000,-/Ha/MT (3% from sum insured of Rp 6 million).

Insurance Premium Payers

Government 80% = Rp 144.000,-/HaFarmers 20% = Rp 36.000,- /Ha

Risk Guaranteed Flood; drought; pest.

Terms of Claim Crop failure caused by flooding , drought or pest damage by a percentage of the intensity of ≥75 % . Premium has been paid, Losses checked POPT - PHP , and report to the insurance company then the insurance company decides the amount of loss .

Payments of Claim 14 days after approval of the amount of loss . Claims paid into the account of farmers / POKTAN .

Team for Accelerating Regional Financial Access/TPAKD

TPAKD inisiated by OJK and Ministry of Home Affairs

•Member of TPAKD: OJK, regional government, financial service institutions, association offinancial service institutions, representation of central government and academician.

TPAKD under coordination of Governor/Regent/Mayor

•To encourage financial access to boost regional economic growth

•To find a breaktrough to open productive financial access

•To encourage the role of financial service institutions in regional development

•To explore the potensial of regional economic

•To optimize the potensial of regional economic to provide productive funding to developSME, start up business and priority sector.

Objectives of TPAKD

Strengthening MFI

UU No. 1 tahun 2013, mandating OJK to foster, regulate and supervise MFI

•In the long term, OJK hopes that every village has at least 1 micro finance institution

Long run target: 1 village 1 MFI

•Collecting data of potential MFI, such as BKD, BMT, Lumbung Desa and etc,

•Counselling to MFI founder candidates

•Giving management training to MFI that has operational licence from OJK

Programs


Pawnshop Revitalisation

29

PegadaianSince last 5 years, private pawn business have been

rising

Since last year, OJK has been preparing

regulation to revitalise pawnshop

PT Pegadaian has been monopolizing pawnshop for

over 50 years

Private pawn business is not regulated yet


Venture Capital Revitalisation

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Type of legal

entity

Paid up capital

requirement

(Rp)

Limited liability

company (PT)50 billions

Cooperation 25 billions

Comanditaire

venootschap25 billions

Limited liability



Comanditaire

venootschap10 billions

Syaria unit - 10 billions

Venture

Capital

Syaria

venture

capital

Requirement of paid up capital under POJK No. 34/POJK.05/2015

Type of legal

entity

Paid up capital

requirement

(Rp)

Limited liability



Joint Venture 30 billions

Venture

Capital

Previous requirement of paid up capital (PMK No. 18/2010)


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Thank You

Edy Setiadi

Documents

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