JAKARTA -- Indonesia on Thursday officially launched a branchless banking program designed to serve the millions of citizens who lack regular accounts. Domestic lenders Bank Mandiri, Bank Rakyat Indonesia, Bank Central Asia and Bank Tabungan Pensiunan Nasional are rolling out the new services.
Under the program, banks appoint "agents" -- say, owners of small businesses or teachers -- to carry out banking operations for registered customers.
To apply for an account, citizens need to meet certain requirements, such as holding Indonesian nationality, living in the vicinity of an agent and lacking an existing bank account. Each account holder can deposit a maximum of 20 million rupiah ($1,600) and transfer up to 5 million rupiah per month through their agent. The government has set these rules to minimize safety concerns.
Users can check their balances and transfer money using mobile phones.
The four lenders plan to appoint some 128,000 agents by the end of 2015, more than 30 times the total number of bank branches in the country. An additional 13 banks are expected to join by the end of the year. Branchless banking will help lenders gather information on individuals -- data that could be used to offer credit down the road.
Only one in five of Indonesia's 250 million citizens has a bank account, according to the World Bank. In an archipelago of more than 13,000 islands, high-income earners are concentrated in major cities, leaving rural areas with little access to financial services.
Indonesia's Financial Services Authority, known as OJK, says banks will be able to expand the operations to loans, insurance and securities.
"The focus is to open access," Muliaman Hadad, the chairman of OJK, told reporters Thursday. "We expect to develop the infrastructure so we will reach every person, even in" far-flung places. Hadad added that branchless banking is expected to reach some 60 million to 90 million users, more than the existing number of bank account holders.