L

isted lender Bank Negara Indonesia (BNI) signed on Wednesday a deal with PT Sumber Alfaria Trijaya '€” owner of minimarket chain Alfamart '€” to provide a money transfer service aimed primarily at Indonesians based overseas.

This service anticipates the increased amount of overseas remittances during the Islamic fasting month of Ramadhan.

Under this agreement, Indonesians abroad can send money via a BNI outlet, for which they will receive a PIN code. The recipients at home can get the money at any Alfamart store by showing their identity card and the PIN code received from the sender.

BNI'€™s international division general manager, Firman Wibowo, said remittance business still had room to grow, especially as at least 60 percent of Indonesia'€™s migrant workers had no bank accounts.

'€œThey need money transfer services. That'€™s why we '€” the remittance players '€” are trying to bring outlets closer to customers,'€ Firman said.

The agreement signed on Wednesday involves as many as 5,000 Alfamart outlets nationwide. BNI already has 1,631 branches offering the remittance service.

The lender has also built cooperation with a number of companies, including PT Pos Indonesia with its 4,000 outlets, PT Pegadaian with 6,000 outlets and PT Bank Bukopin with 600 outlets, as well as regional banks and rural banks with 300 and 20 outlets, respectively.

BNI has also been working with the Singapore Post, Japan Post Service, the Seven Eleven chain in Hong Kong plus a subsidiary, BNI Remittance Ltd, in Hong Kong.

According to Firman, BNI recorded US$16 billion in incoming fund transfers during January-May this year, about half of the total $32 billion transfer of funds during the period.

About 90 percent of the $16 billion flowing into the country was corporate transactions, while the remaining 10 percent comprised individual transactions.

Indonesia received $7.2 billion from around 6.5 million migrant workers overseas in 2012, according to a World Bank report released earlier this year.

BNI has seen its remittance transaction volume reach 200,000 per month so far this year, increasing by around 17 percent compared to 170,000 per month last year.

Firman said the transaction volume would likely increase by 30 percent during the fasting month on the back of money transfers from Indonesians working overseas.

'€œGiven the 30 percent increase, we will likely see 60,000 additional transactions during Ramadhan, which means we can reach 260,000 transaction for the month,'€ Firman said.

The bank is aiming to handle $70 billion worth of transferred money by year-end, an increase of around 24 percent compared to last year.

The remittance business contributes about 10 percent to BNI'€™s fee-based income. BNI reported Rp 4.29 trillion in net interest income and Rp 2.24 trillion in non-interest income in the first quarter of the year.

The maximum amount of money that can be withdrawn at any one time from an Alfamart store is Rp 5 million, for which BNI will charge Rp 30,000 for the transfer. Firman declined, however, to reveal the fee Alfamart would receive from the remittance service.

Alfamart corporate affairs director Solihin said his company'€™s cooperation with BNI would improve its services and attract BNI transfer recipients to shop in the minimarket.

Alfamart, according to Solihin, was expecting its sales to rise by 20 percent during Ramadhan compared to regular months.

Apart from collaborating with BNI, Alfamart provides payment services for motorcycle credit, electricity bills, telephone bills, train tickets, newspaper subscriptions and Pay TV. The company is also due to launch a new cooperation with low-budget carrier Citilink.

Shares in BNI, traded under the code BBNI, closed at Rp 4,075 on Wednesday, a 1.8 percent drop compared to a day earlier. Meanwhile, shares in Sumber Alfaria (AMRT), closed at Rp 6,450, declining by 4.44 percent from the previous day.