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Advancing financial inclusion is at the forefront of many developing countries' government agendas and is widely recognised as crucial to promoting healthy communities and supporting economic development.
According to the Institute of International Finance, Indonesia is home to 6 per cent of the world's unbanked population, ranking third behind India and China on a global scale.
" That is the hardest part of the job – instilling that spirit to motivate them to dream. Only they can change themselves."
Veronica Colondam, Founder of YCABWith only 36 per cent of Indonesians over the age of 15 having a bank account, access to financial services and financial literacy education is a high priority for President Joko 'Jokowi' Widodo, the Indonesia Financial Services Authority (OJK), international financial institutions and community organisations alike.
One such community organisation is Yayasan Cinta Anak Bangsa (YCAB), established in 1999 to help Indonesian youth become independent through education, economic assistance and welfare creation.
BlueNotes' spoke with Veronica Colondam, founder of YCAB about their work in Indonesian communities, the critical role financial literacy education is playing, and how MoneyMinded – ANZ's adult financial literacy program – is impacting financial literacy levels in Indonesia.
LA: Can you tell us about YCAB and why the foundation was established?
VC: We focus on underprivileged youth development. YCAB has three programs which focus on healthy lifestyle promotion, education and economic empowerment. We believe every child has the right to live life to their fullest.
Ibu Ani, a MoneyMinded* participant from Indonesia's Kemanggisan region, shares her experience.
I am a 'stay at home' mum but sometimes I do catering – mostly meatballs – when I receive orders from my friends.
I knew about the MoneyMinded program from YCAB since I've taken part in some of their trainings before and I was interested to join MoneyMinded because it covers financial management.
After finishing the training, I think I'm more financially organised. I am able to manage my income so I won't need to worry at the end of every month. I've also learned to save more effectively.
I put aside my money more regularly in a specific amount for a certain time in order to be able to reach my saving goal, which is to have a kiosk to run my catering business.
Before attending MoneyMinded, I waited for catering orders to come, and only then would I start preparing. However now I prefer to make food with or without orders and then I will go to my child's school to sell it. I also offered meatballs to the nurses at the hospital where my father's used to going to.
The point is, ever since I joined the training, I've decided to go out and make money, rather than wait for it to come to me.
To my friends, who are mostly mothers, I will certainly recommend they attend MoneyMinded because it is very helpful!
YCAB started from a traditional non-profit to a growing sustainable social enterprise. That's why we've evolved to combine education and economic assistance so the beneficiaries can be sustained. We are enabling them by facilitating change.
But there is no way anyone can change unless they want to fight for it. That is the hardest part of the job – instilling that spirit to motivate them to dream. Only they can change themselves.
My satisfaction comes from seeing the lives not only changed but also transformed in their own world and improving the quality of life for them and their family.
LA: What do you see as the greatest need among youth in Indonesia?
VC: For underprivileged youth in Indonesia, I see education, work opportunities and entrepreneurship knowledge as the biggest needs.
LA: Can you tell us why financial literacy education is important?
VC: About 43 per cent of Indonesian people live with income less than IDR 20,000 per day (the equivalent of $A2.00).
To make real economic growth, we need to educate people at the household level. Financial literacy education is becoming essential for the average family.
Everyone needs to be able to balance a budget to be able to buy a house and furniture, fund their children's education and save for retirement. Financial literacy education will help people to help themselves and make responsible choices.
By helping themselves and their families, financially educated people will make a positive contribution to economic growth and poverty reduction in Indonesia.
LA: What results are you seeing from the MoneyMinded program ANZ provides?
VC: MoneyMinded gives participants a basic understanding of financial management, which is critical for the low-income women entrepreneurs we work with at YCAB.
After attending MoneyMinded training, a woman in Tanah Abang made a big decision – she stopped borrowing money from YCAB Cooperative. She realised she did not need the loan anymore, the profit from her business was enough to run her business and put aside savings for her daughter's education.
Other women have similar stories. One women recently made her dream come true. The Vision Board, which is part of Money Minded material, encouraged her to picture her dreams on a paper and she drew a kiosk with a glass shelf in it. Business expansion is one of her dreams. Today she is a proud owner of a kiosk with a glass shelf in it.
After attending MoneyMinded, 94.7 per cent of our clients reported their money management skills have improved, and we have also seen the number of female entrepreneurs who feel more organised with their money jump from 22 per cent to 56 per cent. Analysis from the Wharton School of the University of Pennsylvania showed the average annual revenue of clients who received Money Minded training increased by 71 per cent after the program.
Money Minded has successfully empowered these women to make business decisions related to financial management, refine their vision to make it more realistic and encourage them to achieve it.
LA: Can you share an interesting fact about your work?
VC: Education is a powerful tool that can enable economically and socially marginalised adults and children to lift themselves out of poverty and participate fully in society.
Three million students drop out of school every year in Indonesia. We are all about creating hope and opportunity, creating a change in the lives of young people who lost their opportunity in education. If we cannot change the entire three million kids, I know we can save the world of someone today.
YCAB and ANZ have been working in partnership since 2012 to build money confidence, skills and knowledge in Indonesian communities. MoneyMinded is delivered in Indonesia through a partnership with YCAB.
Lorraine Armilla is a contributing editor at BlueNotes
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
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Motivating others to dream
2016-02-01
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EDITOR'S PICKS
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Access to financial services for Pacific Islanders can be disproportionately challenging when compared to other regions due to the geographically dispersed populations in many Pacific Island countries.
2014-12-12 20:35 -
Financial inclusion makes extraordinary differences to individual lives, whether in developing countries where a bank account can be the line between a poverty trap and a thriving business or in a developed economy where a debt cycle can become a wealth plan.
2015-03-17 13:38 -
If nothing else, the Senate's Standing Committee on Economics Inquiry into the interest rates charged on Australian credit cards has made me even more aware of the low levels of financial literacy in Australia.
2015-09-25 12:35