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Spire Indonesia studies Mobile Money and Branchless Banking for MSEs

+ Official report on TNP2K

30 September 2014

Spire Indonesia was privileged to work with The National Team for the Acceleration of Poverty Reduction (TNP2K) to assess the potential demand for Mobile Money and Branchless Banking services (MM & BB) in Indonesia. Data was gathered from 400 survey interviews with Micro and Small Enterprise (MSE) owners and 16 focus groups spread across 4 provinces which consisted of Bali, South Sulawesi, South Sumatra and West Java.

According to the Spire study, MSEs can potentially make use of a number of MM & BB services wherein the gender or the province of the owner need not be a hindrance. However, there may be differences in market opportunities due to variations in the size of bank transactions as well as current levels of bank use.

The TNP2K study was designed to gather insights on three fronts:

Explore short-term savings accounts

With about 85% of the MSEs having money left over at the end of the day after catering to all business and household expenses, there is massive potential demand for this.

Handle large business-to-business transactions

MSEs often have to carry cash in bulk to a supplier. The suppliers’ payment varies between IDR100,000 to IDR400,000 for micro-enterprises and small enterprises respectively.

Implement electronic payment systems for employees

Wage payments are mostly done by cash on a daily or monthly basis. This is where MM & BB services could enable hassle-free, electronic payment. Furthermore, the study revealed that female MSE owners are a more viable market due to their detailed approach to managing finance – aside from being more tech-savvy.

The study found that MM and BB service providers must compete with payments made using both cash and other existing bank services. There was an inherent tendency for MSE owners to use cash rather than accept transactions electronically.

For smooth collaboration between financial service providers and MSEs, an enabling regulatory environment is needed, one that allows the service providers to take advantage of different market opportunities and provide improved services to MSEs. At the same time, electronic payments should be promoted for government employee salary payments, taxation and mandatory insurance schemes.


For media enquiries, please contact:

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

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