T

he country'€™s leading lenders have officially submitted requests to Bank Indonesia (BI) for permits to venture into digital financial services (DFS), a top BI official has said.

BI payment system executive director Rosmaya Hadi said that Bank Mandiri, Bank Rakyat Indonesia (BRI) and Bank Negara Indonesia (BNI) had submitted their requests. '€œWe are processing the requests and are looking to issue the permits within the next few days,'€ she said.

The permits would allow the lenders to launch DFS as early as next month, according to Rosmaya.

The DFS program is part of the regulator'€™s efforts to provide easy financial services to millions of unbanked people '€” those who use alternative financial methods as they do not hold bank accounts '€” living in rural areas of Indonesia, simply by using cell phones.

Data from the World Bank shows that only one quarter of Indonesia'€™s total population has access to financial services, such as savings and loans.

BI'€™s recent DFS regulation stipulates that lenders must collaborate with separate agents to run the services program, which is limited to financial transactions, such as money transfers and payments.

The agents, according to BI, may come in the form of individuals or legal entities, but only banks under the BUKU IV category '€” with core capital of Rp 30 trillion (US$2.53 billion) '€” can work with individual agents. The BUKU IV category currently consists of Mandiri, BRI, BNI and Bank Central Asia (BCA).

The partnership with individual agents was limited to the BUKU IV category because such lenders already possessed strong systems and adequate capital to mitigate potential risks that could stem from the agents, Rosmaya said.

'€œIndividual agents and legal entities must have worked with the bank or been the bank'€™s customers for at least two years. That way, we can know for sure about their financial background and capacity,'€ she said.

Meanwhile, BNI, which did not participate in BI'€™s DFS pilot project last year, claimed that it is ready to deploy its agents for the program.

BNI consumer and retail director Darmadi Sutanto said that it would partner with state-owned pawn shop PT Pegadaian and retailer PT Sumber Alfaria Trijaya '€” owner of minimarket chain Alfamart '€” to provide the financial services at their outlets.

Yusuf Koerniawan, BNI'€™s head of research and development channeling management division, added that the bank currently had dozens of customers in around 60 regencies that Indonesian migrant workers originated from '€” such as Indramayu, West Java and Banyuwangi, East Java '€” who could serve as the lender'€™s individual agents.

Other state-controlled lenders, Mandiri and BRI, are looking to work with 13,000 and 5,000 agents, respectively, this year.

BRI claimed that its agents handled an average of 200 transactions per day during the previous pilot project, while Mandiri said that its agents managed a total of 1,500 transactions throughout the project period.

Of all the BUKU IV banks, BCA is the only lender that has not submitted its permit request to BI. BCA director for retail and commercial business Suwignyo Budiman said that the private lender had no plans yet to collaborate with agents to provide the services, citing its higher coverage in urban areas.