Opportunities In Indonesian Remittance Market, A 2015 Report

Indonesia is the fourth most populous country in the world (after China, India and the United States). An estimated half of the total Indonesian population is below age of 30 years, the country promises to be the source of global labor force in coming years. Indonesia banks are divided into commercial banks, known as “public banks” Bank Umum (BU) and rural banks, or “people’s credit banks” Bank Percreditan Rakyat (BPR). Commercial banks have a full range of functions and are able to participate in the payments system while BPR, the rural banks have restricted operational area. BU is permitted to deal in foreign exchange but BPR is not. Banks that deal in foreign exchange are described as Bank Devisa(Foreign Exchange Banks) and are required to obtain a license from BI to carry out banking functions involving foreign exchange. Indonesia banking system has 120 BU’s and 1837 BPRs. Non Financial Institutions such as MFIs are also not permitted to handle money transfers except Bank Rakyat Indonesia (BRI) which is a state owned commercial bank with a specific mandate for microfinance. It has its network of sub offices and units at sub-district level throughout the country.

With foreign exchange reserves at $[hidden] Billion at the end of 2013, remittances comprise significant 16% of this value. Also, with decreasing current account balance over the years, Indonesian economy is eyeing growth in the remittance market as a source of foreign money in the country.

“Indonesia ranks 3rd highest remittance receiving country in South East Asia”

Indonesia Remittance industry has been consistently growing over the past 5 years and has been a significant contributor the growing economic conditions. The total remittance market in Indonesia is 16,469.5 USD Million.


[Hidden] of the overall remittances in Indonesia is routed through formal channels and 20% through informal channel. Outward remittances play a significant role in Indonesian remittance market with more than 30% of market share. Percentage adoption of formal channel in outward remittances from Indonesia is estimated to be higher at [hidden] % than the percentage of [hidden] % in case of inward remittances. This signifies the requirement of higher regulation or effective systems to regulate the inward remittances channel. Informal modes of remittance are non recorded and are facilitated through Non licensed individual remittance agents, hand carried by Migrant, co-workers/ family /friends etc.Together, Inward and Outward remittance market in Indonesia is estimated to grow at a CAGR of 8.8%.

Being the third largest recipient of remittance in South East Asia with around 6.5 million migrant workers, both inward and outward remittance from Indonesia is expected to grow steadily over the next few years. Indonesian government has been working towards developing the remittance market by identifying opportunities in migrant destination countries and promoting the recruitment companies. Together with them, the government is also now finding new overseas labor markets needing skilled and semi-skilled workers who are able to access better pay and working environment. The critical Success factors for Indonesian remittance market are pricing, good investment products for NRI’s and large remittance network for banks.

Indonesia_updated mark ppt

buy button



Table of Contents 

1.0 Executive Summary

2.0 Macroeconomic Overview

2.1 Remittance in Indonesia

2.2 Use of remittance by category

3.0 Labour Migration to Indonesia

3.1 Category wise overseas employment of Indonesians

3.2 Estimated Country wise emigration of Indonesian workers each year

3.3 Reasons for migration from Indonesians

3.4 Labour Migration –Way Ahead

4.0 Overview of remittance market

4.1 Minimum Remittance Regulation

4.2 Characteristics of remittance industry in the country

4.3 Channels of remitting in Indonesia

4.4 Key players’ profile

4.5 Drivers and inhibitors of remittances

5.0 Remittance in Indonesia

5.1 Remittance Market Size –Indonesia (Formal and Informal, Inward and Outward)

5.2 Remittance projections from 2014 to 2019

5.3 Formal inward and outward remittance by countries

5.4 Formal Remittance -Market Share by Players

5.5 Formal Remittance -Market Share by Channels

5.6 Cost of sending remittance to Indonesia from least costly corridors

5.7 Emerging trends in remittance business

buy button