Jakarta. The Asian Development Bank (ADB) announced Thursday that they had approved a $500 million loan package to help drive Indonesia’s financial inclusion.

The loan will focus on expanding access to financial services for Indonesia’s vulnerable groups, including micro, small, and medium enterprises (MSME), which contribute around 61 percent to the country’s gross domestic product (GDP). It will also target women, youth, and rural populations.

According to ADB, the freshly announced loan also marked the third sub-program of its initiative to support Indonesia in establishing a more inclusive financial sector. The new financing came just a few months after ADB greenlit a policy-based loan worth $500 million to expedite the coal-reliant Indonesia’s energy transition. 

“By combining digital innovation with targeted support for vulnerable groups, this initiative will help create a more resilient and inclusive financial sector. ADB is committed to supporting Indonesia’s journey toward universal financial access,” the bank’s country director for Indonesia Jiro Tominaga was quoted as saying in a press statement.

A 2024 Financial Services Authority (OJK) survey shows that Indonesia’s financial inclusion index stands at 75.02 percent. Indonesia is still far behind its target of achieving a 90 percent financial inclusion by this year. 

As of end-December 2023, ADB has committed 836 public sector loans, grants, and technical assistance totaling $46.3 billion to Indonesia. ADB also claimed that 50 percent of its approved financing in Indonesia were going to climate mitigation and adaptation efforts. President Prabowo Subianto recently decided to revise Indonesia’s net zero emission deadline to 2050, a decade earlier than what Indonesia had been aiming for.