The World Bank is supporting abranchless banking program in Indonesiawith a pilot project to beginin Bali.

The program will be jointly implementedby the International Finance Corporation (IFC), a member of the
World Bank; Bank Sinar Harapan, amember company of Bank Mandiri;and cellular operator AXIS.

IFC Access to Finance program manager Roger Thomas Moyes said that the branchless banking program
was expected to ease access to banking services and reach potential banking consumers that do not currently have access to bank branches.

Moyes said the amount of people using banks in Indonesia remains quite low compared to its neighbors.

Despite the fact that Indonesian banking has existed for at least 100 years, only 60 million people of Indonesia’s total population of 240 million people have bank accounts, he said.

This is in stark contrast to the rapid growth of cellular phone users in the country.

About 114 million people in Indonesia currently have cellular phones, which were introduced only two decades ago.

The power of cellular phones has been tremendous in the country, and the branchless banking program
would target cell phone users with little or no access to banks, he said.

Moyes said the program would enable people, especially those living in villages, to conduct banking transactions through special agencies assigned by local banks.

The agencies could be licensed individuals or institutions and people could deposit or withdraw money
through them, he said.

They can even request loans and other banking services without having to actually go to banks, he said.

Moyes said programs like the planned one for Indonesia have been successful in Kenya, South Africa
and the Philippines. “So far Kenya has been the most successful country, with seven million branchless banking customers.

My dream, within two years, is that there will be 10 million branchless banking customers in Indonesia,”
Moyes said.

Bank Sinar Harapan Bali president director Ida Bagus Kade Perdana said the bank is still waiting for approval from the Bank Indonesia. “This will be a new kind of banking for Indonesia,” Perdana said.

He said branchless banking would still be vulnerable in terms of fi nancial security since the program
would involve non-banking agencies.

“We would make security our fi rst priority when implementing the program,” Perdana said.

AXIS corporate strategy and business development head Achmad Sugondo said they are ready to support
the program through their cell phone services.

“Currently, AXIS has reached almost 70 percent of Bali’s population,” Sugondo said.

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