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Seminar explores Digital Financial Services (DFS) for Indonesia’s poor

24 June 2014

Seminar explores Digital Financial Services (DFS) for Indonesia's poor

Spire Research and Consulting conducted a study to explore the prevalence of Digital Financial Services (DFS) across various Indonesian cities. The study also examined the effects of the Family Hope Program – Program Keluarga Harapan (PKH) – which aimed to address the financial needs of the poor. Erwin Widjaja, Country Director of Spire Research and Consulting Indonesia, was invited as a guest speaker to discuss what lies ahead for DFS for the poor.

In his presentation in Jakarta, Widjaja focused on the financial needs of the poor as well as the availability of DFS in Indonesia. He disclosed that, based on a Spire study, the overall unbanked and banked population were interested in saving (99%) and loan (81%) financial products, in comparison to urban consumers who seemed more interested in e-banking services.

According to Spire's study, the most common financial activities among the poor were airtime top-ups (100%) and bill payments (94%). The popularity of airtime top-up, a maximum amount of IDR10,000 weekly, seemed to hinge on the convenience of banking locations.

Widjaja shared that the lack of time to visit the bank branch and expensive monthly administration costs had compelled some poor customers to deactivate their bank accounts. Mobile transactions did not register higher satisfaction ratings either. It was found that most customers were reluctant to use their mobile phones for financial transactions due to perceived user-unfriendliness as well as fears about data and financial security.

He further emphasized that 99% of poor customers still preferred cash payment. Most bought essential items from traditional channels like Warung (traditional "mom-and-pop" provision shops) as these provided a one-stop shopping destination, guaranteed security and the possibility of price bargaining.

At the same time, customers expected more prompt assistance, faster pick-ups and longer operation hours from banking agents. Promotional activities which customers were attracted to included rewards based on transaction volume and value, seminars and local events like music shows.

In conclusion, Widjaja commented that DFS for the poor needed to overcome a trust barrier before taking off. This could be addressed in various ways – like agents carrying official ID cards, sign boards with financial product details or official attribution from the related bank.

For media enquiries, please contact:
Alyssa Tan
Manager, Group Corporate Communications
Spire Research and Consulting
Phone: (65) 6838 5355
E-mail: alyssa.tan@spireresearch.com

Nidhi Singh
Senior Executive, Corporate Communications
Spire Research and Consulting
Phone: (91) 124 646 5499
E-mail: nidhi.singh@spireresearch.com

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