Since 2014, the initiative Fair Finance Guide Indonesia or ResponsiBank has contributed to efforts to encourage improvements in financial industry practices and policies to be more socially and environmentally responsible. ResponsiBank regularly ranks 11 commercial banks operating in Indonesia using the methodology developed by Fair Finance Guide International together with a research consulting firm based in the Netherlands called Profundo. In addition to rating banks, ResponsiBank also conducted a series of case study studies (case study) thematically related to sustainable finance and investment.
One of the themes in the sustainable finance indicators released by Fair Finance Guide International and the main focus in Indonesia today is the theme of financial inclusion. In 2017, ResponsiBank conducted case study research related to the condition of distributing People's Business Credit (KUR) as an instrument for realizing financial inclusion in Indonesia. In 2018, Association Prakarsa as part of the Responsi Bank Indonesia Coalition, they wish to continue case studies on the theme of financial inclusion, particularly in relation to the issue of remittances.
In 2015, Indonesia was listed as being ranked 10th from all over the world with the title of the largest recipient of remittances among other countries (World Bank, 2016). The recorded value of Indonesian remittances in 2015 based on the World Bank report was US$ 10,5 billion. The value of remittances decreased in 2016, but strengthened again in 2017, reaching US$ 8,78 billion. Similar to the large number of PMIs in the region, the highest remittance values came from Saudi Arabia, Malaysia, and Hong Kong (BI, 2018).
Remittances have a positive impact on increasing financial inclusion. For one thing, remittances as a form of transfer contribute to an increase in demand for financial services, such as account opening. However, Indonesian Migrant Workers (PMI) and recipients of remittance funds (PMI families) are usually underserved or have limited access to financial services. PMIs and their families who generally come from poor agricultural households in rural areas face difficulties in accessing formal financial services and institutions. This difficulty is caused by the lack of affordability of formal financial services to the low level of financial literacy. Several other difficulties or obstacles experienced by PMI in accessing financial services to send remittances are administrative-legal requirements which are very complicated, especially for informal PMIs, as well as the high cost of transfers through banks when compared to several other remittance funds distribution institutions, both formally and informally. informal (Santoso, et. al., 2014).
This case study research related to the issue of remittances wants to see banking access, barriers, and innovation in providing remittance services for PMI. As an effort to finalize the design and research instruments for case studies regarding remittances, it is necessary to hold a joint workshop between the research team Prakarsa with expert all at once external researcher who will be involved in this research.
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