Enhancing Financial Literacy in Indonesia's Capital Market

As it approaches its half-century mark, the Indonesian capital market is showing no signs of aging. The surge in the number of millennial investors is playing a significant role in reshaping its dynamics this year. These young investors are contributing to an exciting transformation, with new perspectives and a greater appetite for innovation. 

As a multicultural, archipelagic country, Indonesia faces several challenges when it comes to enhancing capital-market literacy. Some of the challenges are: 

• misinformation and myths about investing, such as equating the stock market with gambling 

• a perception that investing requires significant amount of capital 

• a cultural inclination towards saving rather than investing, and  

• limited access to financial education resources and the internet from remote places. 

To address these challenges, Indonesia Stock Exchange (IDX) initiated nationwide capital-market literacy programs. In 2014, IDX began its first campaign with Gerakan Nasional Cinta Pasar Modal (GeNTa Pasar Modal), which translates to National Movement to Love the Capital Market. This campaign focused on increasing financial literacy and encouraging Indonesians to invest in capital-market products. The campaign also leveraged digital platforms to make investment knowledge and tools more accessible, aiming to broaden Indonesia's investor base and strengthen its financial-market participation. It started with 364,465 investors at the end of 2014 and by the end of 2015, IDX increased the number of investors to 434,107. 

In 2015, IDX launched an initiative campaign called Yuk Nabung Saham (YNS) that translates to Let’s Save in Stocks. This campaign encouraged Indonesians to invest in the stock market regularly, gradually building wealth through long-term investments, rather than seeing the stock market as a risky venture for short-term profits. Investors could trade with minimal capital, starting from IDR100,000 (USD6.5), making it easier for beginners to access the market. This campaign managed to double the number of investors in 2016.  

IDX also initiated the Capital Market School (Sekolah Pasar Modal) program, which is carried out through 29 IDX representative offices across Indonesia. This program provides basic theoretical knowledge on capital markets and  allows participants to apply the knowledge . The classes are free and can be targeted towards specific groups, such as women and housewives, athletes, people with disabilities, the Indonesian diaspora in other countries, journalists, gamers and others.

  

  

Image: SPM for Athletes (Indonesia national under-20 Football Team)  

 

Image: SPM for Journalists 

 

 

Image: SPM for the Finalists of Puteri Indonesia 2024 (National Beauty Pageant) 

 

 

Image: SPM for Santa Maria Junior High School 

 

Image: SPM at Halu Oleo University with IDX’s South East Sulawesi Representative Office 

 

IDX also opens Investment Galleries (IG) and Sharia Investment Galleries (SIG) in university campuses, public spaces and other institutions, collaborating with security companies, universities and the local governments. Currently, there are 908 IGs that are making significant contributions to the Indonesian capital market. This is reflected in the transaction value of IG and SIG: a total of IDR4.76 trillion (around USD315.43 million) between January and August 2024.  

When the COVID-19 pandemic hit in 2020-2022 and physical meetings were restricted, conventional, in-person capital-market educational programs were modified into webinars and online events. This enabled IDX to reach more people in Indonesia. With technological advancements in the financial industry, capital-market education became more accessible. IDX saw a substantial increase in investor participation to 10,311,152 investors by the end of 2022, with the majority being investors under the age of 40. 

On August 10 2023, IDX introduced a new literacy campaign called "Aku Investor Saham," which translates to “I’m a Stock Investor”. This campaign conveys three key messages, which are pride, inclusivity and progress of becoming an investor. Under this campaign, IDX launched the IDX Capital Market Ambassador program and competitions to enhance public engagement, targeting youth and students. IDX encourages them to share their financial knowledge and promote awareness of the benefits of capital-market participation in their local communities, particularly among young and first-time investors, through a points and rewards system.

Another event organised by IDX is the Capital Market Summit & Expo (CMSE), an annual event to enhance public understanding and participation in the capital market. CMSE brings together key stakeholders, including regulators, financial institutions and businesses, to discuss latest trends, opportunities and challenges. Participants gain insights into market developments, investment strategies and the overall economic landscape through various hybrid seminars, workshops and exhibitions. The event also fosters networking opportunities and collaboration among industry players. Last year, the event was attended by around 17,400 participants and 83 exhibitors. This year, IDX will hold another CMSE in a hybrid format, scheduled for November 7-9  2024. 

  

 

 

  

Image: CMSE 2023 

 

To accelerate market inclusion and literacy, IDX has launched a series of educational seminars (Pencanangan), where it signs charter agreements with the government or other institutions to organise events aimed at academics and professionals including civil servants, corporate employees, teachers, and others with a minimum of 1,000 participants per seminar.  

Between January and August, IDX conducted 17,083 literacy and financial education activities across Indonesia, consisting of 7,567 offline events, 4,186 online events and 5,240 events involving Capital Market Ambassadors. The number of participants has risen from 3,157,641 at the end of 2023 to 19,112,457 at the end of August 2024. This growth spans online and offline formats, reflecting a broadening outreach. 

This trend is also mirrored in the data on new capital-market investors, with a million new investors recorded from January to the end of August, a 12.27 percent increase. As a result, the total number of investors grew to 13.66 million in August 2024, compared to 12.17 million in 2023, the majority under the age of 30. Among these, the number of new stock investors rose by 671,489 reaching 5.93 million by the end of August, up from 5.25 million in 2023, a growth rate of 12.78 percent.  

IDX is encouraged by the progress in Indonesia’s capital market, but recognises that the number of investors remains small relative to the country’s population. As Indonesia's economy continues to evolve, IDX is dedicated to addressing future challenges and seizing new opportunities to increase financial literacy. IDX believes that enhancing financial literacy can foster more responsible financial behaviour, reduce vulnerability to fraud and deepen understanding of risk management. 

This can contribute to a more vibrant and sustainable capital-market ecosystem. Through harmonious collaboration and strong synergy with the Government, Indonesian Financial Services Authority (OJK), Indonesian Self-Regulated Organisations (SRO), securities companies and other capital market stakeholders, IDX believes Indonesia's capital market can become more accessible, robust, inclusive and resilient.