Indonesia : Financial Market Development and Inclusion Program (Subprogram 2)

Sovereign Project | 48207-002

The proposed subprogram 2 supports the government's main reform priorities in developing and making the finance sector more inclusive, and represents a medium- to long-term partnership between the Asian Development Bank (ADB), the government, and the Financial Services Authority (OJK). The government's priority areas include (i) strengthening the regulatory structure for financial stability, (ii) deepening the financial market, and (iii) enhancing financial inclusion with a focus on promoting access to financial services to poor households and women.

Project Details

  • Project Officer
    Jayawardana, Poornima G.W.
    Sectors Group
    Request for information
  • Country/Economy
    Indonesia
  • Sector
    • Finance
Project Name
Financial Market Development and Inclusion Program (Subprogram 2)
Project Number
48207-002
Country / Economy
  • Indonesia
Project Status
Active
Project Type / Modality of Assistance
  • Loan
  • Technical Assistance
Source of Funding / Amount
Loan 3541-INO: Financial Market Development and Inclusion Program (Subprogram 2)
Source Amount
Ordinary capital resources US$ 400.00 million
TA 9333-INO: Promoting Innovative Financial Inclusion
Source Amount
Technical Assistance Special Fund US$ 800,000.00
TA 9333-INO: Promoting Innovative Financial Inclusion
Source Amount
Financial Sector Development Partnership Special Fund US$ 300,000.00
TA 9333-INO: Promoting Innovative Financial Inclusion
Source Amount
Technical Assistance Special Fund US$ 300,000.00
TA 9333-INO: Promoting Innovative Financial Inclusion
Source Amount
JP Morgan Chase US$ 310,000.00
TA: Financial Market Development and Inclusion Program (Subprogram 2)
Source Amount
Financial Sector Development Partnership Special Fund US$ 100,000.00
Strategic Agendas
  • Environmentally sustainable growth
  • Inclusive economic growth
  • Regional integration
Drivers of Change
  • Gender Equity and Mainstreaming
  • Governance and capacity development
  • Knowledge solutions
  • Partnerships
Sector / Subsector
  • Finance / Finance sector development

Gender
Effective gender mainstreaming
Description
The proposed subprogram 2 supports the government's main reform priorities in developing and making the finance sector more inclusive, and represents a medium- to long-term partnership between the Asian Development Bank (ADB), the government, and the Financial Services Authority (OJK). The government's priority areas include (i) strengthening the regulatory structure for financial stability, (ii) deepening the financial market, and (iii) enhancing financial inclusion with a focus on promoting access to financial services to poor households and women.
Project Rationale and Linkage to Country/Regional Strategy
The program includes three subprograms aligned with the government's strategy and critical finance sector reforms. The first subprogram focused on establishing the OJK as a unified and independent financial services regulator and implementing international best practices. Subprogram 2 focuses on support to the consolidated finance sector master plan and advancing OJK's fiscal independence. Responding to government concerns of rising inequality and the recommendations from the 2016 National Financial Inclusion Strategy, subprograms 2 and 3 further expand ADB's engagement in financial inclusion, with a focus on improving poor families' access to financial services, financial literacy, and consumer protection. This provides the platform for a subsequent dedicated financial inclusion program in 2020. The approach uses policy-based lending as it embeds the policy matrix within the government's policy decision-making process. The loan proceeds provide incentives for reforms.
Impact

Annual growth rate of finance sector increased

Project Outcome

Description of Outcome

Development and inclusiveness of the finance sector increased

Progress Toward Outcome
Loan-single tranche was released on 15 Sept 2017 and was financially closed on 17 Nov 2017.TA9333-INO: VP approved an increase in TA amount on 12 Aug 2020 ($300,000). Revised TA completion date is 27 June 2022.The TA is ongoing and the following are the detailed activities.The TA has engaged i) International Financial Inclusion Expert, ii) National Financial Inclusion Project Manager, ii) National Fintech Expert, iii) International Digital Platform Development Experts, iv) International Youth Engagement Expert, v) National Experiential Financial Literacy Teacher Training Firm, and vi) International Monitoring and Evaluation Expert to support the implementation of the activities under the TA outputs of i)increasing access to finance through innovative approaches, ii) financial literacy, and iii) consumer protection. The TA completion date was first extended from 30 June 2019 to 30 June 2020 to allow time for additional activities, i.e., consultant and resource person engagements in the field of financial inclusion and the engagement of services to develop a geospacial financial services mobile application and digital financial literacy. The second extension to 27 June 2022 was to allow for a change in scope to support the expansion of the youth financial inclusion ambassadors' program (DIKA) including support for the EIFIL an OJK-ADB joint initiative to support regional development banks to promote financial inclusion, and is aligned with the Post Program Partnership Framework (2019 2024) of the FMDIP Program and the Promoting Innovative Financial Inclusion Program (PIFIP) PBL that was approved in December 2020. On 10 December 2020, ADB approved an increase in TA amount by $300,000 to support the development of the Last Mile pilot project to address the digital route-to-market strategies adopted by consumer-packaged goods (CPG) manufacturers.

Implementation Progress

Description of Project Outputs

Regulatory structure for financial stability strengthened

Financial market deepened

Financial inclusion enhanced

Status of Implementation Progress (Outputs, Activities, and Issues)
Loan-single tranche was released on 15 Sept 2017 and was financially closed on 17 Nov 2017.TA9333-INO: VP approved an increase in TA amount on 12 Aug 2020 ($300,000). Revised TA completion date is 27 June 2022.The TA is ongoing and the following are the detailed activities.The TA has engaged i) International Financial Inclusion Expert, ii) National Financial Inclusion Project Manager, ii) National Fintech Expert, iii) International Digital Platform Development Experts, iv) International Youth Engagement Expert, v) National Experiential Financial Literacy Teacher Training Firm, and vi) International Monitoring and Evaluation Expert to support the implementation of the activities under the TA outputs of i)increasing access to finance through innovative approaches, ii) financial literacy, and iii) consumer protection. The TA completion date was first extended from 30 June 2019 to 30 June 2020 to allow time for additional activities, i.e., consultant and resource person engagements in the field of financial inclusion and the engagement of services to develop a geospacial financial services mobile application and digital financial literacy. The second extension to 27 June 2022 was to allow for a change in scope toll support the expansion of the youth financial inclusion ambassadors' program (DIKA) including support for the EIFIL an OJK-ADB joint initiative to support regional development banks to promote financial inclusion, and is aligned with the Post Program Partnership Framework (2019 2024) of the FMDIP Program and the proposed Promoting Innovative Financial Inclusion Program (PIFIP) that was approved in December 2020. On 10 December 2020, ADB approved an increase in TA amount by $300,000 to support the development of the Last Mile pilot project to address the digital route-to-market strategies adopted by consumer-packaged goods (CPG) manufacturers.
Geographical Location
Nation-wide

Safeguard Categories

Environment
C
Involuntary Resettlement
C
Indigenous Peoples
C

Summary of Environmental and Social Aspects

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples

Stakeholder Communication, Participation, and Consultation

During Project Design
During Project Implementation

Contact

Responsible ADB Officer
Jayawardana, Poornima G.W.
Responsible ADB Department
Sectors Group
Responsible ADB Division
Finance Sector Office (SG-FIN)
Executing Agencies
Ministry of Finance Directorate General of Budget Financing and Risk Management

Timetable

Concept Clearance
24 Jun 2014
Fact Finding
23 Jan 2017 to 03 Feb 2017
MRM
26 Apr 2017
Approval
28 Jun 2017
Last Review Mission
-
Last PDS Update
29 Mar 2021

Funding

Loan 3541-INO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
28 Jun 2017 18 Jul 2017 07 Sep 2017 31 Mar 2018 - 15 Nov 2017
Financing Plan
  Total (Amount in US$ million)
Project Cost 400.00
ADB 400.00
Counterpart 0.00
Cofinancing 0.00
Loan Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 18 Jun 2024 400.00 0.00 100%
Cumulative Disbursements 18 Jun 2024 400.00 0.00 100%

TA 9333-INO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
28 Jun 2017 19 Sep 2017 19 Sep 2017 30 Jun 2019 31 Dec 2024 -
Financing Plan/TA Utilization
ADB Cofinancing Counterpart Total
Gov Beneficiaries Project Sponsor Others
1,400,000.00 310,000.00 0.00 0.00 0.00 0.00 1,710,000.00
Cumulative Disbursements
Date Amount
18 Jun 2024 1,549,534.58

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.


Evaluation Documents See also: Independent Evaluation

None currently available.


Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
National MSME Digital Platform Developer Individual - Consulting Closed
National Onground Youth Financial Inclusion Stakeholder Engagement Specialist Individual - Consulting Closed
National Consultant - Financial Inclusion of Women Owned MSMEs Individual - Consulting Closed
National Gender Expert Individual - Consulting Closed
National Gender Expert on Financial Inclusion_GENFI-N-JPM Individual - Consulting Closed
International Sustainable Development, Youth Financial Inclusion & Civil Society Outreach Expert Individual - Consulting Closed
National Firm for Gender-Sensitive Value Chain Study VC-FIRM-N Firm - Consulting Closed
National Gender Expert on Women-owned SMEs Individual - Consulting Closed
National Gender Expert on STEM and Digital Inclusion for Women Individual - Consulting Closed
International Researcher and Project Coordinator Individual - Consulting Closed
International Expert (Advisor) -Team Leader Individual - Consulting Closed
National Research Assistant-Reskilling Individual - Consulting Closed
Gender Data and Finance Analyst_PIFI-SXD-N Individual - Consulting Closed
International Gender Expert for MSMEs Sector Individual - Consulting Closed
International Youth Financial Inclusion & Civil Society Engagement Individual - Consulting Closed
National Onground Youth Financial Inclusion Coordinator Individual - Consulting Closed
National IT firm- Geospatial Mobile App Developer Firm - Consulting Closed
Financial Inclusion Expert Individual - Consulting Closed
National Monitoring and Evaluation Expert Individual - Consulting Closed
Experiential Financial Literacy Teacher Training Firm - Consulting Closed
International Financial Inclusion Expert Individual - Consulting Closed
National Financial Inclusion Expert Individual - Consulting Closed
National Financial Inclusion Project Manager Individual - Consulting Closed
Experiential Financial Literacy Curriculum & Teacher Guide Development Expert Individual - Consulting Closed
International Youth Engagement Expert Individual - Consulting Closed
Internaitonal Financial Inclusion Expert Individual - Consulting Closed
Experiential Financial Literacy Curriculum & Teacher Guide Development Expert Individual - Consulting Closed

Contracts Awarded

Contract Title Approval Number Contract Date Contractor | Address Executing Agency Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
Capacity Development Technical Assistance 9333 17 Mar 2021 NFrnds Singapore Pte. Ltd.(SINGAPORE) | .77 Robinson Road, #13-00 Robinson 77 068896 Singapore Fiscal Policy Office 279,000.00

Procurement Plan

None currently available.