Indonesia: Bukopin shoots into branchless banking project

Bukopin retail director, Agus Hernawan, has claimed that the pilot project will be conducted at 10 PPOB points in South Jakarta and West Java. Currently, it has 26,000 PPOB points and it is expected to increase to 31,000 by the end 2015, thejakartapost.com reports. The branchless banking program is to be launched by the Financial Services Authority (OJK) and participating banks in March 2015 as part of the effort to increase access to finance throughout Indonesia, where only 20% of its more than 240 million persons have access to banks.

In December 2014, the OJK issued a regulation on branchless banking, “Laku Pandai”, which sought to capitalise on the high penetration of mobile phones in the country, (a 1:1 ratio of citizens to cell phones). Under the regulation, domestic banks participating in the program will partner with local agents to provide basic banking services to customers, especially low-income people in remote places. OJK chairman, Muliaman D. Hadad, said that the program, which is expected to generate up to USD 15.67 billion in savings until 2020, would go hand-in-hand with a similar program promoted by Bank Indonesia (BI), dubbed “Digital Financial Services” (LKD).

To support the pilot project, Bukopin signed a partnership on Tuesday with PT Citra Prima Mandiri (Columbia), a furniture and electronics multi-financing retailer, whose 400 outlets would act as Bukopin’s PPOB sites. Agus said the partnership would provide additional fee-based income for the bank.