Understanding Financial Preferences and Practices Among Youth in Rural Indonesia

By Yvonne Chen

This paper is an original, in-depth interview study of 31 low-income rural youth in Eastern Indonesia. This study explores the question: What are the issues critical to understanding youth financial access in rural Eastern Indonesia? This paper is organized in the following sections: 1) an analytic overview of youth financial services around the world; 2) case studies of research done on the topic in Indonesia; 3) a description of the methodology; 4) description of the youth who were interviewed for this study; 5) discussion of main themes that emerged from the interviews and 6) summary with implications. The author finds that Indonesia youth use a wide range of informal financial mechanisms and describes the perceived disadvantages of using a bank that serve as barriers to financial inclusion. These barriers include: discomfort with financial institutions, not having enough money to warrant opening an account, paperwork challenges, negative experience with financial institution and lack of convenience due to location. These findings can be useful to practitioners and policymakers who wish to understand the financial preferences and practices of youth in an effort to improve financial access outcomes.

About the author:
Yvonne Chen is a graduate student of the Master’s of Arts in International Development Studies program at the George Washington University’s Elliott School of International Affairs. She collected the data for this study in Indonesia as a Boren Fellow during the 2010-2011 academic year. She is inspired by the stories of the poor whom she has talked with in the field – stories which often contradict the expert knowledge discussed in Washington, D.C. She is inspired by Michael Sherraden" whose research she first read while working at Juma Ventures.

Image courtesy of Eric Bezine.

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