Member of the Board of Commissioners of the Financial Services Authority (OJK) Tirta Sagara said. The effort that must be made to boost the growth of Islamic finance in Indonesia is to encourage the millennial generation.
He said, Indonesia has very high Islamic economic and financial potential, with a large population. Where 80 percent or about 230 million people are followers of Islam. "In order to boost the growth of Islamic finance, one of the potentials that must be encouraged is from the millennial generation, which is very significant, with a number of around 28 to 30 percent of the total population, plus Generation Z, which is more than 27 percent and generally they already have financial capability," said Tirta in the webinar Promoting Islamic Finance Acceleration Among Millennials, Friday (25/6/2021).
According to him, this millennial group is a critical economy player who can play a role in accelerating the financial growth of the Sharia network. This is supported by the growth of digitalization as a new lifestyle in transacting the millennial generation. "Based on a survey, around 94 percent of Indonesian millennials have been connected to the internet and 79 percent of those millennials open their smartphones 1 minute after waking up. We certainly hope that the Islamic finance industry can capture this potential, and make digitalization one of the choices for new business models," he said.
However, one element that is still a joint PR is that the majority of the population is not familiar with Islamic financial products. Meanwhile, the large number of millennials will only have a significant impact on the development of Islamic finance if they have an adequate level of Islamic financial literacy. "The 2019 Indonesian Financial National Survey shows that the level of Islamic financial literacy is only 8.93 percent, in other words only 9 out of 100 Indonesian adults are familiar with Islamic financial products," he said.
Thus, this literacy rate is much lower than the national average financial literacy level of 38 percent. Therefore, OJK really hopes that the millennial generation can improve literacy and change their understanding of Islamic finance. “Many millennials also think that Islamic financial products are intended for parents. Even though this is not the case, many Islamic economic actors in Indonesia are not Muslims and many young consumers have taken part in Islamic economic finance," he concluded.
Previously, Member of the Board of Commissioners of the Financial Services Authority (OJK) for Education and Consumer Protection, Tirta Segara reported that the growth of Islamic financial assets in Indonesia continues to show an increase. As of the end of March 2021, total Islamic financial assets excluding sharia shares reached Rp1,863 trillion. "This figure is around 10 percent of the total assets of the (conventional) financial industry," he said at the 2021 Millenial Sharia Festival Webinar, Friday (25/6/2021). Tirta explained, this market share came from Islamic banking institutions which reached 6.4 percent. Then the Islamic non-bank financial industry (IKNB) with a market share of 4.4 percent. "The Islamic capital market market share is quite high, which is around 17.3 percent," he explained.
Furthermore, OJK views the issuance of the 2019-2024 Indonesian Islamic finance economic master plan by the National Committee for Islamic Economy and Finance (KNEKS) as an important milestone in the development of the Islamic finance industry in Indonesia. With all the potential it has, OJK hopes that the Islamic finance industry can play an optimal role in supporting the growth of the national economy. Especially during the Covid-19 pandemic. "Moreover, the economic potential and Islamic finance can be supported by a network of financial industries that are currently established and spread throughout the archipelago," he added. Previously, Member of the Board of Commissioners of the Financial Services Authority (OJK) for Education and Consumer Protection, Tirta Segara reported that the growth of Islamic financial assets in Indonesia continues to show an increase. As of the end of March 2021, total Islamic financial assets excluding sharia shares reached Rp1,863 trillion. "This figure is around 10 percent of the total assets of the (conventional) financial industry," he said at the 2021 Millenial Sharia Festival Webinar, Friday (25/6/2021). Tirta explained, this market share came from Islamic banking institutions which reached 6.4 percent. Then the Islamic non-bank financial industry (IKNB) with a market share of 4.4 percent. "The Islamic capital market market share is quite high, which is around 17.3 percent," he explained.
Furthermore, OJK views the issuance of the 2019-2024 Indonesian Islamic finance economic master plan by the National Committee for Islamic Economy and Finance (KNEKS) as an important milestone in the development of the Islamic finance industry in Indonesia. With all the potential it has, OJK hopes that the Islamic finance industry can play an optimal role in supporting the growth of the national economy. Especially during the Covid-19 pandemic. "Moreover, the economic potential and Islamic finance can be supported by a network of financial industries that are currently established and spread throughout the archipelago," he added.
