In Indonesia, millions of people work in the informal sector, from street vendors and online motorcycle taxi drivers to freelancers and local artisans. Despite their significant role in the economy, access to formal financial services such as loans, insurance, or savings remains limited. The reason is simple: many lack pay slips, written financial statements, or collateral, which are typically required by financial institutions.
To address this challenge, financial institutions are now offering more flexible and inclusive financial products. For example, microfinance without large collateral, savings accounts with low deposits, and microinsurance with premiums and benefits tailored to the capabilities of informal communities. Digital platforms also help record daily transactions and assess creditworthiness based on business activity, not just formal documents.
In addition to financial products, financial mentoring and literacy are also key to advancing the informal sector. Many small business owners possess significant potential but lack the understanding of how to manage their finances, separate capital from income, or save regularly. Through simple and easy-to-understand education, they can learn how to use financial products to strengthen their businesses and better plan for the future.
Going forward, collaboration between the government, financial institutions, and digital service providers will be increasingly important. With relevant product innovation and ongoing education, the informal sector can be better connected to the national financial system. This not only helps individuals achieve prosperity but also strengthens the foundation of the Indonesian economy from the grassroots.
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