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opularly known as the farmers and small vendors’ bank, state-owned lender Bank Rakyat Indonesia (BRI) has begun to change its image through the introduction of a new e-commerce platform and other digital banking services to be supported by its own satellite that was launched Saturday.

The history of the country’s second largest lender by assets can be traced back to the late 19th century. The bank was established in the city of Purwokerto, Central Java, as a financial institution to serve the indigenous peoples in the Dutch East Indies, an archipelago still ruled by the Dutch colonial administration.

The bank continued to operate under different names over the proceeding decades, later assigned by the country’s post-independence administration to serve cooperatives, farmers and fishermen — groups that have continued to be BRI’s major customer segments until today.

This “traditional” image, however, has not stopped BRI from offering banking innovations to its customers. It has intensified the promotion of its e-commerce platform “e-pay BRI” and made an effort to improve its digital banking facilities through the launch of “BRIsat”, a satellite dedicated to serving BRI services.

The satellite, an investment of Rp 3.37 trillion, was launched by French satellite launch provider Arianespace at the Guiana Space Center in Kourou, French Guiana, and is expected to begin operating in August.

“BRIsat should improve the service across our 10,300 branch offices, particularly those in remote areas,” BRI president director Asmawi Syam said recently.

The satellite will also help BRI reduce its high information technology expenses. The bank spends around Rp 500 billion per year to rent 23 transponders from nine satellite service providers.

“Owning our own transponders is cheaper than renting, so we think our IT costs will likely fall by 40 percent to Rp 300 billion per year,” BRI finance director Haru Koesmahargyo said.

Meanwhile, BRI director Sis Apik Wijayanto said the bank planned to develop its e-commerce platform by increasing its number of online merchants to 300 by the end of this year, from 100 last year.

“With e-pay BRI, we want to help Indonesian entrepreneurs to improve their competitiveness. By entering the e-commerce business, we hope they will be able to sell their products both in national and international markets,” Sis said last week after signing agreements between BRI and a number of online merchants, including Central Java-based batik maker FarizCraft.

A large part of BRI’s customers, currently around 56 million people, are micro loan customers who live in villages across the archipelago.

Last year, the bank disbursed Rp 558.4 trillion (US$41.9 billion) in loans, with around a third of this channeled as micro loans to 7.9 million customers. The total micro loans disbursed last year increased by 16.8 percent year-on-year (yoy), partly driven by the introduction of the government-backed micro loan program, KUR, in August.

“BRI was able to disburse Rp 12.6 trillion to around 900,000 customers [through the new program],” the bank said in a financial update statement.

BRI’s Sis also said that the introduction of e-pay BRI was expected to increase the contribution of the bank’s fee-based income this year. The bank targets a 48.6-percent growth in fee-based income this year to Rp 11 trillion from Rp 7.4 trillion last year. It hopes the contribution of e-banking-related fees to increase from 22 percent last year to around 30 percent this year.

“We are upbeat about the growth of our e-banking business due to its huge market potential,” Sis said.

The company’s latest data showed that the number of the bank’s mobile banking and ATM users stood at 12.4 million and 40.7 million people, respectively. (vny)