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Locals get banking services without going to the bank
Branchless banking: Cloth seller N
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span class="inline inline-center">Branchless banking: Cloth seller N. Daeng Ngimi (second left) and her friend Nahariah (center) listen as Mukhlis Jamaluddin (second right), a Bank Mandiri agent, explains the lender's basic saving at Pasar Burung Burung in Gowa, South Sulawesi, on Saturday. Mandiri introduced the saving product as part of the wider Laku Pandai campaign, initiated by the Financial Services Authority (OJK). JP/Tassia Sipahutar
N. Daeng Ngimi, 42, looked puzzled when she learned of her cell phone's new function. She had just opened a Bank Mandiri savings account at Pasar Burung Burung market in Gowa, South Sulawesi, some 20 kilometers from Makassar city center.
'So, my phone is now also my savings book? I can just check my balance on my phone? What if I lose it?' the cloth seller asked Mukhlis Jamaluddin, who is a Mandiri agent at the market.
Mukhlis patiently explained Ngimi that her account would remain safe, even if her phone disappeared. 'Nobody can access your account because it is protected by a pin that only you know. You can make a report to the telephone operator if your phone is missing and then come to me. We'll work it out,' he told her.
Ngimi wrung her hands in agitation, insisting that she would like to have a conventional savings book as well. She finally giggled when Mukhlis assured her that the book would also be given to her in a few days.
Roaming through the streets of Makassar every day in her truck, Ngimi felt the need to have easy banking access. She said that she didn't have the time to visit a bank branch to deposit her money, let alone follow its operational hours.
However, that will soon change because she can now make a quick stop at any Mandiri agent to make the deposit, no matter what time of day it is. Mandiri alone expected to partner with around 9,000 agents and have 200,000 new customers by year-end, said president director Budi Gunadi Sadikin.
The agent service is part of a wider Laku Pandai campaign, initiated and launched officially by the Financial Services Authority (OJK) on Thursday in Jakarta, to reach out to a wider community without having to establish physical branches, while also employing existing customers as agents.
The end goal, according to OJK chairman Muliaman D. Hadad, is to help millions of underbanked and unbanked Indonesians get access to basic banking services, namely savings and cash withdrawals.
Only one fourth of the nation's estimated 250 million people are financially literate and already have proper access to financial services, according to data, well below the percentage of financially literate in neighboring Malaysia and Singapore.
Access to finance remains an issue in archipelagic Indonesia, where infrastructure bottlenecks remain an impediment for people to commute, with over 10 percent of the population still living below the poverty line and around half of the population living on less than US$2 a day.
But the Laku Pandai savings product is expected to reach out to low-end customers looking for no-frills banking with free administration fees and no minimum balance. Furthermore, customers are able to apply for a loan using a referral system, with final approval given by the bank.
Besides state-run Mandiri, the first phase of the Laku Pandai includes the involvement of three other banks, namely state lender Bank Rakyat Indonesia (BRI) and private lenders Bank Central Asia (BCA) and Bank Tabungan Pensiunan Nasional (BTPN).
'The campaign is also expected to improve the quality of life for both Laku Pandai customers and agents,' Muliaman said, pointing to the fact that while customers will receive the benefit of easy banking access, the agents will get additional income from the services they provide.
Sukarman Salim, a BRI agent in Jayapura, said that becoming an agent had helped him and his wife go beyond making ends meet. The 66 year-old previously only ran a small grocery at home that generated around Rp 9 million (US$689) in net income per month.
'Now I can get several extra million to send to my children, who live apart from us,' he said on Friday after BRI launched its Laku Pandai program in Papua.
According to BRI president director Asmawi Syam, the lender ' which is already a major player in the micro loan sector ' is hoping to work with around 50,000 agents across the country by the end of 2015.
It has recorded more than Rp 7 trillion in savings transactions so far and estimates that the figure will exceed Rp 22 trillion by year-end.
However, despite the seemingly practical and self-explanatory services, the agents must cope with abundant questions from their customers-to-be.
'Younger customers are easier because a lot of them are already familiar with the mobile banking concept. The older customers are the ones that I must be patient with,' Mukhlis said, smiling.
Meanwhile, Sukarman said that one key to win new customers' hearts was to highlight his availability. 'I am at their disposal and they are very content,' he said.
