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tate lender Bank Tabungan Negara (BTN) has agreed to forge a partnership with telecommunication firm Telekomunikasi Indonesia (Telkom) to further expand the bank'€™s customer base in rural areas.

The two companies, represented by BTN president director Maryono and Telkom president director Arief Yahya, signed a memorandum of understanding (MoU) on the partnership on Thursday.

The first phase of the collaboration will see BTN serve the activities of more than 200,000 of Telesindo Shop'€™s agents and resellers, using the lender'€™s mobile banking platform.

Telesindo is a gadget and prepaid phone credit retailer that is controlled by publicly listed phone maker and distributor Tiphone Mobile Indonesia (TELE).

TELE became part of Telkom Group in September, when 25 percent of its ownership was taken over by PINS Indonesia, a Telkom wholly owned subsidiary in telecommunication services and development business.

According to BTN retail funding and distribution director Irman A. Zahiruddin, its platform will enable agents and resellers to shift to electronic-based transactions from the current cash-based.

Data from Telesindo shows that it has 200 agents and 200,000 resellers, whose activities can generate up to Rp 1 trillion (US$82.4 million) in monthly sales.

'€œThey have been managing the funds manually, meaning that the resellers must send the money to the agents via cash transfers every time. We aim to better facilitate the transfers using our mobile banking platform,'€ he said on Thursday.

In the first stage, the facility is provided as part of a pilot project that targets Telesindo'€™s agents and resellers residing in the Greater Jakarta area, and South Tangerang and Pandeglang in Banten province.

Meanwhile, Maryono said that the publicly listed lender would automatically see the number of its banking customers grow from the pilot project as the agents and resellers were required to open a savings account at BTN.

At present, BTN has around five million customers, in both lending and funding segments.

Maryono said that once the pilot project was completed at the end of the year, it would be expanded to reach Telesindo'€™s outlets in other areas.

'€œThe potential is huge because there are many people currently involved in the prepaid phone credit business. We expect the number to surge and it will drive our low-cost funds portfolio higher,'€ he added.

According to BTN'€™s first-half financial report, the low-cost funds'€”composed of savings and demand deposits'€”made up for almost 45 percent of its total third-party funds by the end of June.

In the future, the BTN-Telkom partnership would include other services for Telesindo'€™s agents and resellers as well, such as remittance and payment gateway.

Maryono added that the partnership would also provide the basis for the bank'€™s upcoming participation in the branchless banking and digital financial services (DFS) programs, promoted by the Financial Services Authority (OJK) and Bank Indonesia (BI), respectively.

'€œWe can utilize Telesindo'€™s outlets as our own branches to disburse loans, gather funding and facilitate payments among micro customers,'€ he said.