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ublicly listed Bank Tabungan Pensiunan Nasional (BTPN) will begin its branchless banking project this month to tap the country's unbanked and underbanked citizens and increase its customer base.

The bank will launch the mobile-based project in Darmaga, Ciampea and Cibungbulan subdistricts in Bogor, West Java province, at the end of May; and in Pekutatan, Mendoyo and Penebel subdistricts in Bali after that.

It had established a partnership with mobile network operator PT XL Axiata for the project and was looking to also seal partnerships with PT Telekomunikasi Selular (Telkomsel) and PT Indosat in the third quarter of 2013, BTPN business development head Donny Prasetya said in Jakarta on Thursday.

The project, dubbed BTPN WOW!, is part of the pilot branchless banking program launched by Bank Indonesia with five banks on May 15. Besides BTPN, Bank Mandiri, Bank Sinar Harapan Bali, CIMB Niaga and BRI are also taking part in the program, which aims to accelerate financial inclusion.

The World Bank's 2011 Global Financial Inclusion Index shows that only 20 percent of Indonesia's total adult population has an account at a formal financial institution. The figure is much lower compared to neighboring countries.

 According to Bank Indonesia (BI), low financial literacy has resulted in low deposit-to-GDP and loan-to-GDP ratios, which stood at 39.1 percent and 32.8 percent as of December 2012. Meanwhile, the central bank requires the five participating banks to name their agents (UPLKs) to support their branchless banking projects. The UPLKs may be in the form of small shops, gas stations or other business outlets.

BTPN, which provides most of its loans to pensioners and micro enterprises, is currently in the process of selecting 60 UPLKs for its WOW! project. 'They will be chosen from our existing micro loans customers. That way, we can study their background to ensure their financial capability,' Donny said in Jakarta on Thursday.

He added that BTPN began developing its branchless banking system in July 2011 and had spent around US$2.3 million in investments. Customers with XL, Telkomsel or Indosat SIM cards can sign up for a WOW! account and access its mobile features, ranging from cash transfers to cash withdrawals.

BTPN deputy president director Djemi Suhenda said that the bank hoped to increase its fee-based income from the project. 'We will receive a fee every time our customers use their account to make purchases or pay their bills. However, we have not set any specific target because this is still a pilot project,' he said.

Japan's Sumitomo Mitsui Banking Corporation recently announced that it had agreed to acquire 40 percent of BTPN's shares from the bank's shareholders, including TPG Nusantara, for $1.5 billion.