Branchless banking targets rural areas

Commercial banks are set to start branchless banking programs in rural areas of Bali to increase the financial transactions of farmers, especially in cocoa and clove centers. The branchless banking project pilot was initiated by Bank Indonesia (BI) in May and was launched at five banks — Bank Mandiri, Bank Rakyat Indonesia (BRI), Bank Sinar Harapan Bali, Bank Tabungan Pensiunan Nasional (BTPN) and CIMB Niaga —to facilitate financial inclusion. It is aimed at delivering access to financial services for rural populations unable to access banking.

Bank Sinar Harapan has been chosen to pilot the project in Karangasem, Tabanan and Gianyar, while BTPN was assigned to work in Jembrana and Tabanan. Donny Prasetya, head of sales BTPN WOW!, the bank’s branchless banking project, said that based on the 2011 Global Financial Inclusion Index, only 19.6 percent of Indonesian adults had a bank account. The number, he said, was far lower than that in Malaysia and Thailand, which reached 66.7 percent and 77.7 percent respectively. The central bank aims to answer this matter by testing the program, collaborating with agents (UPLK) in eight provinces.

“With BTPN WOW!, the bank is expanding its services to the masses by utilizing cellular phone technology and support from agents,” Donny said during a workshop on branchless banking in Denpasar on Wednesday. Donny said that the agents’ role in expanding financial services throughout the country was important to add points of sale for customers. Also, it reduced the bank’s operational costs as it did not require opening a physical branch. Donny went on saying that BTPN’s project had been designed to fulfill the needs of the masses, so it would be simple for all to use. The services were accessible through GSM cellular phones, even with a low signal in the location.

Customers could open a bank account through the nearest agent with no minimum first transaction or monthly administration cost, he said. In Bali, BTPN is targeting Mendoyo, Pekutatan and Penebel districts, all of which are centers for cocoa, clove and plantation farmers. Donny said that the bank found that in these areas people mostly kept their money at home, using cash transactions everyday and were located far from any financial institutions. In fact, a single transaction by a cocoa farmer could reach hundreds of millions of rupiah, he said. “We keep educating people and disseminating the information in those areas,” he said.

Economist from the Center for Information and Development Studies (CIDES), Umar Juoro, said that financial inclusion was closely related to the nation’s economic growth and distribution of income. By providing more access to financial services, Umar said that it could boost prosperity, saying Indonesia was a potential market for branchless banking. Former BI Bali-Nusa Tenggara office head Dwi Pranoto said that his side was pushing the use of an electronic money (emoney) system for various transactions in Bali, such as shopping, buying gasoline, using the toll road and parking fees.

Dwi, who now heads the East Java office, said the objectives were effectiveness, ease of use and security in financial transactions for individuals, as well as the business community. As of now, he said that BI was building the infrastructure for non-cash and remote transactions by credit and debit cards, and internet and mobile banking.

source : bali daily

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