Indonesian Youth Face Financial Challenges: WWB Report

Financial Literacy and Risky Behaviors

A comprehensive study by Women's World Banking (WWB) has revealed that Indonesian youth aged 18-25 are struggling with financial literacy and are exposed to risky financial behaviors. The research, titled "Empowering the Next Generation: A Path to Financial Confidence for Indonesia's Youth," involved 1,500 students and 117 young people from various stakeholders.

Key Findings

The study uncovered several alarming trends among Indonesian youth:

1. Exposure to Online Gambling: 8 out of 10 young men and 2 out of 10 young women admitted to participating in online gambling activities.
2. Impulse Spending: 40% of young people engage in impulsive spending from their emergency funds.
3. Informal Debt: 1 in 4 graduates have significant informal debt at the time of graduation.
4. Financial Product Misuse: 93% of loans taken by young people are used for consumptive purposes.

Gender Disparities

The research also highlighted significant gender differences in financial behaviors:

• Young women tend to save more (86% of total respondents) but are hesitant to invest.
• Young men are more likely to engage in high-risk financial activities (49% of total respondents), such as cryptocurrency trading and sports betting.
• 72% of young investors reported financial losses, indicating a lack of investment confidence across genders.

Recommendations for Improvement

WWB's Regional Director for Southeast Asia, Angelique Timmer, emphasized that supporting young people requires more than just increasing financial knowledge. It demands building practical financial skills and confidence to adopt healthy financial behaviors. The organization is working with financial service providers, regulators, and policymakers to:

1. Strengthen digital financial capabilities
2. Create safer digital pathways
3. Develop inclusive financial products
4. Enhance financial literacy programs beyond traditional economic and business students

The study's findings underscore the urgent need for comprehensive financial empowerment programs to prepare Indonesia's youth for a financially stable future in the digital age.