JAKARTA. While mobile banking in other countries has reached out to communities that have no access to banks, there are still challenges in Indonesia to develop mobile banking services for unbanked people.
A few lenders in the country have been involved in a branchless banking pilot project, but some challenges have slowed progress.
Rico Usthavia Frans, senior vice president for electronic banking with PT Bank Mandiri (BMRI), said the bank was taking part in a branchless banking pilot project with Bank Indonesia (BI), the central bank.
Other lenders in the project include Bank Rakyat Indonesia (BRI), CIMB Niaga, Bank Tabungan Pensiunan Nasional (BTPN) and Bank Sinar Harapan Bali.
Cell phone operators are also involved in the project. The pilot project, slated to wrap up in November, is being conducted in the provinces of West Java, South Sumatra, Central Java, East Java and Bali.
“We’re still trying to understand the needs of the unbanked,” Rico told The Jakarta Post recently.
Bank Mandiri, he said, had deployed 10 agents responsible for helping hundreds of customers, including farmers and low-income entrepreneurs. They are assisted to access banking services by registering for accounts.
“To do so, we have equipped these agents with cell phones,” he said.
BRI spokesperson Muhammad Ali said the lack of infrastucture in some parts of the country had hampered efforts to extend banking services.
“Indonesia is an archipelago with more than 17,000 islands, requiring significant investments to reach out to those living in rural areas,” he said.
Gemma Cullen, ANZ business project manager for cell phone banking in the Pacific, shared the lender’s experience in developing the services in some Pacific countries.
ANZ has launched goMoney, its mobile banking application. In the initial phase, the bank has launched services in the Pacific countries of Papua New Guinea (PNG) and Samoa, with the Solomon Islands and Vanuatu to follow.
She added that to work around the telecommunication networks available, the goMoney platform used unstructured supplementary service data (USSD), which meant the menus in the application were text-based.
“People do not need fancy phones,” she said.
Aside from BI, other financial service institutions have launched branchless financial services for the unbanked in Indonesia.
Grameen Foundation and Qualcomm Inc. have partnered with Ruma, a tech-based startup that works with low-income entrepreneurs, 82 percent of which are women, to sell prepaid cell phone credit, electricity and other financial services.
Ruma operates in Banten, Jakarta, West Java, Yogyakarta and Central Java, and has acquired a quarter of a million customers through field agents.
“Trust is a very important factor in getting people to utilize branchless banking services,” said Aldi Haryopratomo, the co-founder of Ruma. (The Jakarta Post)
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