DPD RI Committee IV Encourages Implementation of the P2SK Law to Strengthen Financial Inclusion and Productive Financing in West Papua

09 September 2026 oleh admin

Manokwari, dpd.go.id – Committee IV of the House of Regional Representative of the Republic of Indonesia (DPD RI) conducted a working visit to West Papua to oversee the implementation of Law Number 4 of 2026 concerning Amendments to Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (UU P2SK). This working visit also served as part of efforts to strengthen coordination and institutional relationships with strategic partners, particularly the Financial Services Authority (OJK) of West Papua and Southwest Papua Provinces.

"This working visit is part of the implementation of the DPD RI's supervisory function, as well as an effort to strengthen coordination and institutional relations with strategic partners, in this case the Financial Services Authority (OJK) of West Papua and Southwest Papua Provinces," said Yannce Samonsabra in his remarks representing the Chair of Committee IV (7/9/2026).

Yannce also conveyed a number of problems in the financial services sector in West Papua that have attracted the attention of Committee IV.

"Although the P2SK Law has provided a framework for strengthening the financial sector nationally, its implementation in the regions needs to be continuously evaluated to align with the characteristics and needs of each region. We noted several issues that require shared attention, including the less than optimal implementation of the new mandate of the P2SK Law to expand access and equalize financial services in the regions, particularly in areas with unique geographic characteristics such as West Papua; the ongoing gap between credit growth in the financial services sector and the financing needs of the productive sectors of the community and business world in West Papua; and the less than optimal development of the digital ecosystem for the financial services sector in West Papua following the strengthening of regulations through the P2SK Law," said the West Papuan Senator.

Meanwhile, the Head of the OJK Regional Office for West Papua and Southwest Papua, Budi Rahman, in his presentation stated that the financial services sector in West Papua and Southwest Papua has shown positive development and remains well-maintained.

"West Papua's economy grew 3.41 percent annually in the second quarter of 2026, while Southwest Papua's grew 2.82 percent. Banking remains the mainstay of the financial services sector, with commercial banks controlling approximately 98 percent of assets, credit, and third-party funds," said Budi Rahman.

Regarding the performance of Islamic banking, Budi stated that the sector continues to improve. Islamic banking assets reached Rp558.86 billion, financing grew 10.74 percent to Rp231.90 billion, and third-party funds increased 8.42 percent to Rp493.07 billion.

"Furthermore, MSME credit as of July 31, 2026, was recorded at IDR 5.40 trillion, with a non-performing loan ratio of 4.71 percent, still below the 5 percent threshold. Meanwhile, capital market development has also strengthened, reflected in the 53.33 percent growth in the number of investors to 54,265 investment accounts in June 2026," said Budi Rahman in his explanation of the current condition of the financial services sector in West Papua and Southwest Papua.

The OJK for West Papua and Southwest Papua also believes that strengthening the financial services sector needs to be directed towards more productive, inclusive, and equitable financing.

"The main challenges faced include West Papua's economic dependence on the processing and mining industries, limited connectivity and high logistics costs, suboptimal access to financing for MSMEs, farmers, fishermen, and informal business actors, and the concentration of economic activity in Manokwari and Sorong. Therefore, we at the Financial Services Authority (OJK) are encouraging the strengthening of the Regional Financial Access Acceleration Team (TPAKD), the expansion of digital financial services and agents in the 3T (frontier and remote) regions, the development of supply chain financing, and collaboration between local governments, financial services institutions, and the business community in financing leading commodities such as Fakfak nutmeg," said Budi Rahman.

Concluding the discussion with the OJK, Yannce hoped that the working visit would not only serve as a formal forum, but also a space for constructive dialogue between Committee IV of the DPD RI and strategic partners in addressing various challenges in the financial services sector in the region.

"We hope this working visit will not just be a formal forum, but a genuine space for constructive dialogue between Committee IV and strategic partners like the Financial Services Authority (OJK) to address the various challenges in the financial services sector across various regions. We hope this meeting will benefit us all, especially the people of West Papua," Yannce concluded.