Mohamad Ihsanuddin Non-Banking Financial Industry Director, Financial Services Authority
Strong micro-financing agencies are the foundation of a good economy

According to the Global Financial Inclusion Index, Indonesia's position falls below 20 percent, lower than Malaysia (66 percent) and Thailand (77 percent). To improve conditions, the government recently amendended Law No. 1/2013 on micro-financing agencies (LKM) to give the marginalized people more access to financial services. The Financial Services Authority (OJK) was then given the mandate to formalize more than 630,000 LKM all over Indonesia so that they can comply with existing regulations.

Mohamad Ihsanuddin, however, admitted that this was not easy. "We must promote it and educate civil servants in the regencies to supervise and monitor the LKM," he said. The OJK is given until January 2016, exactly one year after the law took effect, to ensure that those micro-financing agencies have the proper licenses to run their businesses, a very challenging task for an agency that was set up only three years ago. Ihsan spoke to Tempo English reporter Amanda Siddharta at his office last week.

September 8, 2015