Private lender Bank Danamon has introduced a new facility that allows customers to access banking services through the outlets of its multi-financing subsidiary to provide services to those with no access to banks.

The publicly listed lender, which is owned by Asia Financial, a unit of Singapore’s Temasek, expects to market its branchless banking products through the outlets of its subsidiary, Adira Finance, one of the country’s largest automotive financing firms.

During the celebration of its 60th anniversary on Friday, Danamon launched the initial phase of its branchless banking service in five cities, namely Bekasi (West Java), Wonogiri (Central Java), Teluk Betung (Lampung), Parepare (South Sulawesi) and Lubuk Pakam (North Sumatra).

The bank expects to expand next year to around 50 to 100 out of more than 600 Adira Finance branches and outlets nationwide, consumer banking director Michellina “Dhany” Triwardhany said.

“For starters, we will utilize five branches of Adira to become our Laku Pandai agents,” she said.

The branchless banking service is in accordance with the Financial Services Authority’s (OJK) program, Laku Pandai, which offers banking and financial services to customers with the help of third parties, such as individual and institutional agents, supported by technologies, such as cell phones and other supporting IT facilities.

The Laku Pandai program is based on the National Strategy of Financial Inclusion (SNKI) launched by the government in June 2012 to help increase financial access in Indonesia, where only 20 percent of the country’s 250 million citizens have access to banks.

In the branchless banking program, the bank will offer a type of basic savings account that has several features, including exemptions for customers from paying administrative fees as well as no minimum initial and regular deposits.

Meanwhile, to support its expansion this year, Adira plans to seek fresh funds in the second half from its continuous bond offering plan.

The publicly listed firm expects the bond issuance plan to reach Rp 1 trillion (US$76.3 million) in proceeds, as in its continuous bond offering program (PUB) III it has Rp 8 trillion-worth that will expire next year.

Under the PUB III, which started last year, the company had issued bonds twice, with each of them worth Rp 1.1 trillion and Rp 1.8 trillion, respectively.

The company’s various funding sources are expected to support its new financing growth, which is targeted to grow by 7 percent to Rp 32 trillion this year amid a nationwide weak trend of vehicle sales and financing.

The expected financing this year is lower than the range of Rp 35 trillion to Rp 36 trillion projected previously, or will decrease by about 5 percent year-on-year (yoy).

“The decrease is mainly because of matured loans, but we hope to see better prospect in the second half, as there are expectations from the tax amnesty program and government spending in infrastructure projects,” Adira finance director I Dewa Made Susila said.

The lingering effects of the weak economy continued to affect the company’s performance, as it posted an 8 percent yoy decrease in total financing to Rp 44.6 trillion in the first half. However, in new financing, Adira posted 14 percent growth to Rp 7.9 trillion during the second quarter compared to the previous quarter.

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