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tate-owned lender Bank Mandiri is strengthening its digital financial service across the country by increasing the number of its branchless banking agents to provide the public with wider access to finance.

The lender has already appointed 391 agents who themselves run micro businesses, according to Bank Mandiri president director Budi Gunadi Sadikin.

The majority of Bank Mandiri'€™s branchless banking agents are entrepreneurs who own micro-segment businesses in their neighborhoods, such as small convenience stores and cell phone shops, with average cashflows between Rp 1 million (US$77.70) and Rp 2 million per day.

'€œWe are aiming to have a total 9,000 agents by the end of 2015. One of the efforts to reach that goal is to engage in strategic partnerships with retail companies as well as micro vendors,'€ Budi said during a visit to the North Jakarta neighborhood of one of the agents on Friday.

At least 6,800 of the targeted 9,000 agents this year would be individual micro-business owners, while the remaining 2,200 would be larger business entities, Budi said.

To recruit more individual agents, Budi said Bank Mandiri'€™s branches and micro outlets would be encouraged to approach local micro-business owners. As well as in Jakarta, the bank had begun partnerships with branchless agents in several cities in West Java, he added.

Since the launch of Bank Mandiri'€™s branchless service in October last year, Budi said, agents had served the bank'€™s customers and non-customers through a mobile phone application called mandiri e-cash, which was currently used by 1.3 million users.

The application '€” categorized as an electronic money (e-money) service '€” enables users to conduct micro payments as well as withdraw money from Bank Mandiri'€™s ATMs using only their mobile phone numbers.

According to Budi, the application will help boost wider financial access, the mobile-phone payment service deemed more effective and cheaper for banks than physical branches and ATMs.

The digital services comply with a Financial Services Authority (OJK) regulation issued in December last year on branchless banking, code-named laku pandai or '€œsmart behavior'€, which sought to capitalize on the high penetration of mobile phones in the country, which has a ratio of nearly 1:1 of citizens to cell phones.

The branchless banking program, which is set to be launched by the OJK and participating banks in March, will go hand-in-hand with a similar program launched by Bank Indonesia in 2013, dubbed '€œDigital Financial Services'€ (LKD), as part of efforts to increase access to finance throughout Indonesia, where only 20 percent of the more than 240 million-strong population have access to banks.

That rate is lower than China and India, where access stands at 64 percent and 35 percent, respectively, according to the World Bank'€™s 2012 Global Financial Inclusion Index.

The index also shows that the number of Indonesians with bank accounts stands at only 505 per 1,000 adult citizens, far below neighboring countries such as Malaysia and Thailand with 2,063 and 1,449 per 1,000 adults, respectively.

As the bank continues to step up its branchless service, Budi said the total number of mandiri e-cash users was expected to surge to 50 million in the next five years.

He went on that 1 million of the 1.3 million mandiri e-cash users were citizens who received direct cash aid (BLT) from the government following the reallocation of fuel subsidy funds in November last year, while the remaining 300,000 did not receive any state aid.