Sharia Banking Called Too Slow in Expanding Access as Inclusion Drops

The decline in sharia financial inclusion to 13.24 percent indicates that access to services remains a major problem, even among a public that understands the principles. Handi Risza, Deputy Director of the Center for Sharia Economic Development at INDEF, stated that people who are well-versed in sharia finance cannot easily use its products due to limited networks and services. One of the main issues is that the presence of sharia financial services is still heavily concentrated in large cities. When people in the regions want to use sharia products, the options available are far fewer than those for conventional services. Therefore, sharia banking must be more aggressive and move faster in its penetration. ‘The penetration of sharia bank branch offices and ATMs is still very centralised in big cities,’ Handi told Republika on Thursday (13/8/2026). He noted that this situation causes people who are actually interested in using sharia services to end up choosing conventional banks because they are easier to find and access. The access issue is becoming increasingly critical because the sharia financial literacy rate actually reached 43.07 percent, a figure far above the inclusion rate. This means that knowledge of sharia finance has not fully translated into the use of products and services. Handi assessed that the expansion of the 2026 National Survey of Financial Literacy and Inclusion (SNLIK) coverage to the regions also helped reveal the true state of sharia financial access, which had previously been largely invisible. Communities in areas not yet reached by digital services or physical sharia offices have more limited choices. On the other hand, conventional banking is considered more aggressive in providing easy-to-use services. Digitalisation, promotions, and the presence of various services such as paylater, digital wallets, and fintech provide the public with many entry points to conventional financial services. ‘Sharia financial penetration is not as aggressive as conventional finance, which is very massive, dominating, and seizing potential market share,’ Handi said. Therefore, according to Handi, the sharia financial industry cannot rely solely on education. Sharia financial institutions need to improve their services while expanding their physical and digital presence so that the public can access their products more easily. ‘The first issue is likely access, a classic problem. It means that people who are well-literate have not yet received easy access to be included in sharia finance,’ he said. Besides access, Handi highlighted service quality. The completeness of features and ease of use offered by conventional financial institutions should serve as a benchmark for the sharia industry to improve. ‘The second factor is service. There may be services that are not yet optimal, like those in conventional financial institutions, for example regarding the completeness of features,’ he said. He argued that the sharia financial industry needs to change its approach from simply waiting for the public to come to actively reaching out. Expanding networks and improving service quality are crucial so that people who already understand sharia finance have real access to use it. ‘So all sharia financial institutions need to reform. This is homework that must be addressed going forward,’ he stressed.