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ll government social aid funds for the poor will be accessible through electronic money channels to make it more easy for recipients to cash in the financial assistance.

The facility was made available through a partnership signed on Thursday between Bank Indonesia (BI) as well as the Office of the Coordinating Human Development and Culture Minister and all four ministries under its purview, covering religion, culture and education, social affairs and disadvantaged regions and transmigration.

BI Governor Agus Martowardojo said that previously, either social aid recipients or officials encountered many problems in the process of disbursing social aid in cash, such as consuming a lot of time and money, as well as causing a long queue.

“The problems will not occur when aid is channeled directly to the recipients’ savings or virtual accounts,” Agus told reporters after the signing ceremony at the central bank’s headquarter in Jakarta.

The shift to non-cash social aid is also expected to increase recipients’ saving habits, which could improve their welfare, he added.

BI director for electronics and financial inclusion Pungky P. Wibowo said the social aid funds from the various ministries could be disbursed through lenders that have licenses to provide digital financial services (LKD) and the Laku Pandai branchless banking program.

OJK has given permits to at least seven lenders, including state lenders Bank Mandiri, BRI and BNI, private lenders Bank Central Asia (BCA) and Bank Tabungan Pensiunan Nasional (BTPN), to run the Laku Pandai program. But more banks will be allowed to do so in the future, Pungky said.

Around 612,816 very poor families across the country will receive social aid in June this year under the Social Affairs Ministry’s Family Hope Program (PKH).

The executors of the program include state lending giants Bank Rakyat Indonesia (BRI), Bank Negara Indonesia (BNI) and Bank Mandiri, said the ministry’s director general for security and social protection Harry Hikmat.

Coordinating Human Development and Culture Minister Puan Maharani said the PKH program would be used as the pilot project in realizing the provision of non-cash social aid funds.

Social aid provided by ministries that fall under the Office of the Coordinating Human Development and Culture Minister include the Prosperous Family Savings Program (PSKS) funds provided by the Social Affairs Ministry and the Indonesia Smart Program (PIP) made available by the Religious Affairs Ministry and the Culture and Education Ministry. (vny)