51.8% of the Middle Class Split Expenditures According to Needs

A Katadata Middle Class Insight (KIMCI) survey has found that 51.8% of Indonesia’s middle class now habitually separate their expenditures according to needs. The trend has boosted the popularity of the ‘kantong’ feature in digital banking as an effective tool for managing money.

Prasasti Piter Abdullah, Director of Program and Policy at the Centre for Policy Studies, said that digitally led financial services not only benefit individuals but also MSMEs. ‘Educating MSMEs, I think it is very beneficial because digital banks provide the ’kantong’ (pocket) features, so we can see our financial condition in real time,’ he said in Jakarta on Friday (22 May).

Based on the survey data, there are three main habits among the middle class in managing funds. The popular kantong digital feature is also reflected in a separate study, where 86% of people recognise this feature across banks such as Bank Jago, BCA and Mandiri. Nine in ten users say the feature helps create healthier finances. Indef economist Fadhila Maulida described digital banks as enablers that modernise conventional budgeting habits. ‘Actually, digital banks are more of an enabler that turns envelope budgeting into a digital process,’ she said.

While technology makes things easier, LPPI head Trioksa Siahaan cautioned that discipline remains important for the middle class. He urged people to prioritise essential needs over lifestyle when allocating income.