Академический Документы
Профессиональный Документы
Культура Документы
27 April 2015
Page 1 of 34
BFA, LLC
259 Elm Street, Suite 200, Somerville, MA 02144 USA
Phone: + 617 628 0711 Fax: + 617 336 7455 www.bankablefrontier.com
Study Purpose
World Food Programme (WFP) is looking to innovate its emergency response model by incorporating
more cash payments to complement in-kind payments in times of natural disasters and economic
shocks. Specifically, WFP wants to understand the potential for and challenges of leveraging existing
national government-to-person (G2P) payment programs in the Philippines and Indonesia to implement
and scale WFPs cash transfers in both relief and recovery contexts. To achieve this, WFP Regional
Bureau for Asia contracted Bankable Frontier Associates (BFA) to study potential partner programs
Pantawid Pamilyang Pilipino Program (4Ps) in the Philippines and Program Keluarga Harapan (PKH) in
Indonesia to provide a feasibility assessment of how WFP would effectively work with such programs.
BFA undertook this feasibility assessment by gathering information from key stakeholders the
programs (funders, owners and implementers), the payment service providers (PSPs) and their
partners and the recipients and evaluating the opportunities and challenges related to leveraging
current cash and electronic disbursement mechanisms used by national G2P programs. If WFP aims to
leverage existing programs to make emergency (i.e., short term) disbursements, what will it take for
these programs, their PSP partners and the recipients to effectively handle such a commitment?
Acknowledgments
WFP commissioned Bankable Frontier Associates (BFA) to conduct this study. The authors of this report
are Jamie M. Zimmerman and Kristy Bohling.
We owe sincere thanks to the staff at the Government of Indonesias The National Team for the
Acceleration of Poverty Reduction (TNP2K), Ministry of Social Affairs, State Ministry of National
Development Planning (Bappenas), National Board for Disaster Management (BNPB), Bank Indonesia and
the Coordinating Ministry for Human Development and Culture for their time and support of this
research. We are also grateful to the payment service providers and payment system experts in
Indonesia who contributed so much substance and candor to this study, including e-MITRA, PT Pos,
Bank Mandiri and Bank Rakyat Indonesia (BRI). Particular thanks goes to Michael Joyce at TNP2K, Micra
Indonesia and the WFP country office for their substantial in-country support and guidance throughout
the research. Finally, we are grateful for the support and input from BFA colleagues Caroline Pulver
and Brian Loeb.
This study was funded through the generous support of the UK Department for International
Development (DfID). The opinions expressed in this report are those of the research team and do not
necessarily reflect those of WFP or DfID. The responsibility for the opinions expressed in this report
rests solely with the authors. Publication of this document does not imply endorsement by WFP or DfID
of the opinions expressed therein.
US$1=IDR 12,484 (January 16, 2015)
Contents
Abbreviations.............................................................................................................. 5
Executive Summary ...................................................................................................... 6
1. The Indonesia Context ............................................................................................... 8
2. Program Keluarga Harapan (PKH) The Family Hope Program ............................................. 12
3. PKH Payments Implementation and PSP Experiences ......................................................... 14
4. Program Stakeholder Experiences & Perspectives on E-payments ......................................... 20
5. Recipients Experiences with E-money and PT Pos ........................................................... 22
6. Key Lessons .......................................................................................................... 23
7. Feasibility Assessment and Specific Recommendations ...................................................... 24
Annex 1: BNPBs Interest in Cash Transfers for Disaster Management ........................................ 28
Annex 2: Details of the Family Welfare Deposit Scheme (KKS) ................................................ 29
Annex 3: Comparison of Cost per Transaction for G2P Programs in Low and Middle-income Countries 30
Annex 4: Meeting List .................................................................................................. 32
References ............................................................................................................... 33
Abbreviations
Alliance for Financial Inclusion
Bank Indonesia
Bank Rakyat Indonesia
Bankable Frontier Associates
Bantuan Langsung Sementara Masyarakat
Beras untuk Rakyat Miskin
Bureau of Statistics
Family Welfare Deposit Scheme
Financial Services Authority
Payment service provider
Government-to-person
Indonesian Rupiah
Know-your-customer
Mobile network operator
National Board for Disaster Management
The National Team for the Acceleration of Poverty Reduction
Pantawid Pamilyang Pilipino Program
Program Keluarga Harapan
Sentral Giro Layanan Keuangan (Center of Financial Service Gyro)
State Ministry of National Development Planning
World Food Programme
AFI
BI
BRI
BFA
BLSM
Raskin
BPS
KKS
OJK
PSP
G2P
IDR
KYC
MNO
BNPB
TNP2K
4Ps
PKH
SGLK
Bappenas
WFP
Executive Summary1
1. In Indonesia, WFP works with the National Board for Disaster Management (BNPB) to: (1) strengthen
the Governments emergency response capacity and (2) ensure WFP preparedness to render
operational support to the Government in medium- and large-scale emergencies.2 This report
assesses the potential for the Governments conditional cash transfer (CCT) programs, run by the
Ministry of Social Affairs and not designed for emergency response, to serve as implementing
partners for WFPs objectives.
2. Indonesias first CCT program, Program Keluarga Harapan (PKH), launched in 2007 as part of the
Governments national poverty reduction strategy. The program provides cash transfers to nearly
2.8 million poor and ultra-poor households with children under 18, conditional upon accessing
certain health and education services. The payment amount is variable depending upon household
circumstances and program conditionalities; the maximum potential benefit per pay period is IDR
700,000 (US$56), for a maximum family benefit of IDR 2.8 million (US$224.28) per year. 3
3. The Ministry of Social Affairs uses the Unified Database to coordinate target recipients for its social
protection programs. The database currently contains 96 million individuals from approximately 25
million households. While some stakeholders reported that the database is outdated, the
government is looking to improve it, and it could be a valuable resource for WFP to leverage.
4. PT Pos, the national post office, is the longstanding primary payment service provider (PSP) of
PKH, paying over 99 percent of recipients. 4 It is the only institution with the scale to serve the
program as it is currently designed and will continue to be so in the near term.
5. However, the program recently launched e-money pilots with Bank Mandiri and BRI to pay some
(2,000) recipients. The new partnership was made possible by new e-money regulations issued
2014.
6. These pilots face challenges with customer awareness and capacity. Further, the value proposition
for the recipient (as opposed to for the implementing institutions) of using e-money is less clear:
recipients are used to the PT Pos processes and, other than waiting in long lines to get their
money, they generally do not experience problems with the PT Pos payment system.
7. WFP would benefit from monitoring the progress of e-money in Indonesia. Stakeholders are
increasingly focused on financial inclusion and supporting government-to-person (G2P) e-money
payments. However, until e-money infrastructure and processes are sufficiently robust to pay G2P
recipients at scale and in emergencies, cash-based payouts via PT Pos are the most viable option
for emergency payments. These findings come from an in-depth study of PKH as well as available
information on the new Family Welfare Deposit Scheme (KKS) Program, which WFP should also
monitor in 2015.5
8. To evaluate whether WFP should partner with PKH specifically, the researchers developed six
criteria against which to rate the alignment of WFP needs with PKH characteristics. Table 1
highlights key criteria. Red circles indicate that PKH and WFP do not align; yellow indicates they
align somewhat; and green indicates that they align significantly enough to move forward.
Table 1: How PKH Aligns with WFP Key Criteria
Criteria
Program has effective
relationship with the
PSPs.
Rating
Comments
PKH has a longstanding relationship with PT Pos, which is updating G2P
accounts to include store of value (to keep up with government
expectations). The program is also open to relationships with e-money
providers to create the most efficient processes. At the head office level,
timely payments did not appear to be an issue, but nearly all e-money and
This report is based on interviews conducted in Indonesia in December 2014; it represents the situation with PKH as of that
time.
2
DRAFT Emergency Logistics Enhancement: BNPB-WFP XXX-Year Joint Strategy. WFP draft of May 11, 2014.
3
International Policy Centre Policy Research Brief 42. Originally from Ministry of Social Affairs, PKH Profile, 2013.
http://www.ipc-undp.org/pub/IPCPolicyResearchBrief42.pdf
4
This paper refers to recipients as those receiving G2P payments. Beneficiaries or households are all those ultimately touched
by the program, for example through the recipient spending money on the needs of the family or household, not just the
individual.
5
Launched in November 2014, KKS is a modernized and more comprehensive version of the Bantuan Langsung Sementara
Masyarakat (BLSM), which was a bi-annual fuel subsidy provided by the former government. KKS intends to reach 15.5 million
recipients.
Rating
Comments
PT Pos recipients interviewed mentioned they did not receive payments
for the first half of 2014.
Partnering with PT Pos, PKH appears to have the ability to add recipients
in a brief timeframe. However, PT Pos claims that only paying recipients
quarterly (rather than bi-monthly, for example), provides it with sufficient
time between payments to prepare. Natural disasters are not predictable
events that offer months to coordinate and prepare payments.
PT Pos has in place the necessary infrastructure for making scaled G2P
payments and has even remained open during past natural disasters.
Meanwhile, e-money providers continue to develop their agent networks
and mobile infrastructure. However, while all three providers appear to
be relatively low-cost compared to PSPs from cash transfer programs in
other middle- and low-income countries, PT Pos fees are nearly two times
higher than the e-money providers fees.
Recipients interviewed in urban and rural areas appeared comfortable
with PT Pos payments, despite the long lines. E-money recipients
experienced challenges with the e-money program, many of which they
are likely to overcome if they continue to receive e-money payments.
The Unified Database is significant, covering the bottom 40 percent of
Indonesias socio-economic strata. However, data are now more than
three years old, with research suggesting that exclusion errors and other
missing indicators exist, which may pose challenges in leveraging it in
emergency situations. The timeline for updating it is apparently
approaching. PKH serves recipients in urban and rural areas but reaches
significantly fewer than other government programs such as KKS, and
unconditional cash transfer program, and Raskin, a rice subsidy program.
PKH staff play a key communicator role between PKH and recipients;
those interviewed appeared to be cautiously willing to support emergency
payments. However, PKH stakeholders focus on e-money and financial
inclusion and the programs quarterly payments schedule may conflict
with WFPs priority of rapidly getting cash into the hands of those affected
by disasters.
9. WFP has an immediate opportunity to partner with a G2P program to leverage the cash-based
payment system already in place with PT Pos. Meanwhile, WFP should monitor and consider
eventually partnering with e-payment providers as payments infrastructure improves.
900
800
700
600
500
400
300
200
100
Indonesia
Thailand
Malaysia
Singapore
Philippines
Vietnam
Source: World Bank, 2012. Brunei Darussalam, Cambodia, Lao PDR and Myanmar not included. Data not available for Myanmar.
Brunei, Cambodia and Lao had combined GDP of US$40 billion in 2012.
The Government increasingly favors decentralization: the 33 provinces and over 500 districts are
responsible for delivering public services. While the central government believed decentralization
would improve government services, the approach has exposed capacity gaps, particularly in poorer
and more remote regions, which has affected its implementation of government programs.11
Food Insecurity
Despite Indonesias economic growth, it has not seen a quick reduction in hunger and malnutrition.
The government has combatted food insecurity by introducing food price stabilization and social
protection programs. Its social protection and poverty alleviation programs are divided into three
clusters. Cash and in-kind transfers to individuals, community-based programs and microfinance
This report is based on interviews conducted in Indonesia in December 2014; it represents the situation with PKH as of that
time. For the list of stakeholders interviewed, see Annex 4.
7
Human Development Index, 2013 rankings. http://hdr.undp.org/en/statistics/
8
Sandra Lawson et al. Beyond the BRICs: A Look at the Next 11. Goldman Sachs, 2007. http://www.goldmansachs.com/ourthinking/archive/archive-pdfs/brics-book/brics-chap-13.pdf. The other Next 11 countries are Bangladesh, Egypt, Iran, Korea,
Mexico, Nigeria, Pakistan, Philippines, Turkey and Vietnam. While each country is unique and the 11 countries are not directly
comparable, strong economic growth in all 11 countries have led to businesses recognizing their stature as the Next 11 countries
to emerge on the global economic stage.
9
Indonesia has the largest GDP of ASEAN (Association of Southeast Asian Nations). GDP (current US$). World Bank. 2012:
http://data.worldbank.org/indicator.
10
2011 is latest year with available data. GINI index measures the extent to which the distribution of income (or, in some cases,
consumption expenditure) among individuals or households within an economy deviates from a perfectly equal distribution. A
GINI index of 0 represents perfect equality, while an index of 100 implies perfect inequality. GINI Index. World Bank. 2011:
http://data.worldbank.org/indicator.
11
Stephen Turner et al. Country Portfolio Evaluation: Indonesia: An evaluation of WFPs Portfolio, 2009-2013. Inception
Report. March 2014.
WFP Indonesia
WFPs current operations in Indonesia focus in large part on effectively enabling and providing food
assistance to best compliment the governments evolving development and aid priorities. WFP
maintains close partnerships with the Coordinating Ministry for Human Development and Culture and
with BNPB. Current WFP-BNPB partnership objectives include strengthening the Governments
12
Terms of Reference: Indonesia: An Evaluation of WFPs Portfolio (2009-2013) from WFPs Office of Evaluation.
Terms of Reference: Indonesia: An Evaluation of WFPs Portfolio (2009-2013) from WFPs Office of Evaluation.
14
Terms of Reference: Indonesia: An Evaluation of WFPs Portfolio (2009-2013) from WFPs Office of Evaluation.
15
DRAFT Emergency Logistics Enhancement: BNPB-WFP XXX-Year Joint Strategy. WFP draft of May 11, 2014.
16
For more on BNPBs interest in cash transfers for disaster management, see Annex 1.
13
Account at a formal
financial institution
Debit card
Indonesia
13.4
8.3
19.6
10.5
Thailand
77.7
11.2
72.7
43.1
Singapore
58.6
10.3
98.2
28.6
Malaysia
46.4
10.4
66.2
23.1
Philippines
14.9
7.7
26.6
13.2
Vietnam
17.6
3.3
21.4
14.6
Lao PDR
4.3
2.6
26.8
6.5
Cambodia
5.1
4.0
3.7
2.9
Source: World Bank Findex, 2011. Data for Brunei and Myanmar not available.
However, Indonesia has seen an increase in electronic payments over the past five years. From 2007 to
2013, ATM/debit card, credit card and e-money payments more than tripled, as shown in Exhibit 2.
Exhibit 2: Volume of ATM/Debit Card, Credit Card and E-Money Payments in Indonesia, 2007-2013
300
IDR millions
250
200
150
100
50
2007
2008
2009
2010
E-Money Transactions
2011
2012
17
18
2013
DRAFT Emergency Logistics Enhancement: BNPB-WFP XXX-Year Joint Strategy. WFP draft of May 11, 2014.
World Bank. 2012. http://data.worldbank.org/indicator. Full references in References.
19
250
200
6
5
150
4
100
3
2
50
1
0
26
This paper refers to recipients as those receiving G2P payments. Beneficiaries or households are all those ultimately touched
by the program, for example through the recipient spending money on the needs of the family or household, not just the
individual.
Critical Actors
PKH is a centrally managed social protection program in a highly decentralized government. The
Ministry of Social Affairs runs the program, yet benefits from the support of several other nationallevel government agencies: the BPS (Bureau of Statistics) manages targeting; Bappenas (the State
Ministry of National Development Planning) provides oversight; and TNP2K provides additional
support for systems modernization, particularly payment systems and the implementation of e-money
pilots. According to the International Policy Centre, TNP2Ks influence on the program has grown since
2010 as it promotes faster expansion of the program, the creation of more efficient systems and
greater impacts on the targeted populations.27
PKH Targeting
Beginning in 2005, BPS conducted proxy means tests to identify extremely poor households as well as
health and education facilities in each district (in order to determine readiness for PKH). BPS recorded
19.1 million households in 2005 and then updated the registry in 2008. In 2008, BPS included 14
indicators to determine households program eligibility. Since 2012, the program has relied on the
Unified Database. According to PKH program officials, the Unified Database targets and selects new
PKH recipients, but local government officials use the list to make recommendations for new recipients
and then the Ministry of Social Affairs makes the final selection. This system has also been the basis
for e-money pilots.
The Unified Database does have limitations. First, the 2011 update survey only captured households
living in fixed residences, and not homeless or displaced individuals or families. Second, since 2011,
the Government has not approved funding to update the data. Finally, BPS did not collect the data
with electronic payments in mind. Hence necessary information for account (bank or e-money)
opening, such as accurate name spelling, dates of birth and identification (ID) numbers, is erroneous
or missing.
27
International Policy Centre Policy Research Brief 42. Originally from Ministry of Social Affairs, PKH Profile, 2013.
http://www.ipc-undp.org/pub/IPCPolicyResearchBrief42.pdf
PKH Communications
The program has an interesting operational structure that involves local program officers (called
facilitators) and group leaders, rather than direct contact with each and every recipient (see Exhibit
4). The national level provides policy, supervision and operational guidance, and it has authority over
payment orders and actively communicates with PT Pos.
Facilitators mobilize PKH recipients and serve as a point of first contact between the community and
the PKH program. They teach recipients about the payments and why they are receiving the money,
and they alert recipients about when payments will arrive. They also monitor the recipients and help
PKH update the recipient database. Their role in keeping an open line of communication is especially
useful when comparing PKH to KKS. One source interviewed reported that even a month after KKS
payments had arrived, some recipients had yet to get their payments, or were just picking up their
payments; they had not heard the payments had arrived and the program has no local staff akin to
PKHs program officers to inform recipients.
Facilitators first inform group leaders when payments will arrive, what documents recipients will need
and when recipients should withdraw their money from the post office. Group leaders are recipients
selected to lead communications with facilitators. Since they live in the same neighborhoods as other
recipients, group leaders inform the recipients through word of mouth, phone call or text message.
Exhibit 4: PKH Flow of Communications
None
None
4,000 physical
branches, plus ad hoc
community based
payments
Only one withdrawal
per month
Yes
Card & ID
Withdrawal Restrictions
Store of Value?a
Authentication
Required/Used
Fee per Transaction
Charged by PSP to PKHd
BRI
Bank Mandiri
E-money (T-Bank)
E-money (E-Cash)
to IDR 700,000 per quarter and up to IDR 2.8
485
2 areas in Jakarta &
East Java
None
None, but if no
positive balance on
SIM, it will expire
10 agents in 2 districts
1,304
Koja, Cirebon, Kupang
None
None
Yes
PIN or EDCb & ID
Yes
Phone number OTPc &
ID
IDR 6,000 (US$0.48)
None
None, but if no
positive balance on
SIM, it will expire
20
Value is stored on the SIM in the case of the e-money accounts and into GIRO POS accounts for PT Pos. Neither of these are
savings products, per se, as they do not offer interest.
b
EDC stands for electronic data capture.
c
OTP stands for one-time password.
d
Recipients do not pay a fee to withdraw ever.
28
At a January 2015 workshop on e-money hosted by TNP2K, several commercial banks expressed a keen interest in competing
for PKH payments now that more entities qualify as PSPs. However, they were surprised to hear that PKH expected them to
provide the accounts free of charge to recipients. Banks said it would severely decrease their business case for operating the
accounts.
In Emergencies
PT Pos staff interviewed in Padang, West Sumatra said PT Pos would be an effective partner in
preparing for and operating through emergencies. They cited their ability to pay about 6,000 new
PKH recipients with only one months notice from the regional office in late 2014. PT Pos was
prepared to make the payments because its systems were in place, staff were prepared and PKH
facilitators were available to support the process and verify recipients identities. The branch also
stayed open in the aftermath of a 7.9-magnitude earthquake in 2009, attesting to its reliability.
Staff suggested that, should it have an agreement with PKH or WFP to do so, making emergency
payments to more than the current number of recipients in the wake of a natural disaster would be
relatively simple, provided they had clear instructions about (1) how much money the branch will
need to disburse, (2) how many recipients the branch will pay and (3) what resources and support the
29
The researchers cannot speculate as to whether Bank Indonesia would authorize such a request.
Registering Recipients
Under a relaxed KYC agreement with BI, Bank Mandiri and BRI have been able to open e-money
accounts for recipients with the following minimum information: name, ID number, PKH ID, birthdate,
mothers maiden name and occupation. For the e-money pilot, PKH required e-money recipients to
register their e-money accounts and SIMs. The vast majority, 91 percent, do so with assistance from
others, typically a PKH program officer, a family member or a group leader. While more than half of
recipients were able to successfully register their e-money account on their first try, one third
reported it took three tries to successfully register their accounts due to network problems. 32 Mass SIM
registration was also a significant hurdle, as most SIMs in the marketplace are not registered to their
owners. In the PKH program, TNP2K hired interns to manually register all 1,800 SIM cards over USSD.
30
Information gathered by MICRA at TNP2K-led workshop on the evaluation of e-money for PKH payments. January 2015.
A program-wide number of recipients unable to withdraw their payments due to SIM card issues was not available at the time
of the research.
32
TNP2K, 2014.
31
33
To learn more about PKHs experience disbursing payment through BRI bank accounts, see the 2012 OPM report Disbursement
of Social Cash Transfers through Bank Accounts.
34
Withdrawals at ATMs and merchants seem merely aspirational at this time, as most BRI ATMS are unstandardized and not yet
compatible with the SIM-based cards.
35
Payment process comes from interviews that BFA conducted in December 2014 and TNP2K & Spire Research and Consulting.
Monitoring and Evaluation of Digital Payments Services for a Pilot of Payment of PKH Beneficiaries. Presentation. January 29,
2015.
36
Payment process comes from interviews that BFA conducted in December 2014 and TNP2K & Spire Research and Consulting.
Monitoring and Evaluation of Digital Payments Services for a Pilot of Payment of PKH Beneficiaries. Presentation. January 29,
2015.
37
Information gathered by MICRA at TNP2K-led workshop on the evaluation of e-money for PKH payments. January 2015.
TNP2K
TNP2K has done the most of all the stakeholders to promote and design G2P e-payment solutions. Its
staff monitor and evaluate the PKH e-money pilots and have commissioned new research to consider
the future of e-payments opportunities, not only for PKH but for several other government social
protection schemes as well.
TNP2K believes that e-money and electronic payments, by offering multiple pay points and
information via mobile phone, will offer flexibility and convenience to recipients while boosting the
operational efficiencies of the program. Its staff were encouraged to see that in the early stages of
the emoney pilots, 10 percent of recipients left a balance in their accounts and 15 percent of
recipients chose to withdraw from ATM instead of agent.
However, TNP2K staff also offered several observations on the most critical issues related to the PKH
payments and e-money pilots. First, staff interviewed noted that TNP2K overestimated recipients
familiarity with phones and capacity to manage SIMs and the understanding of the added value that emoney accounts might provide them. Despite a sensitization campaign spearheaded by Bank Indonesia
on e-money for recipients, TNP2K staff involved in the pilots noted that children helped their mothers
operate the phones and few recipients choose to save. Second, they expected that real-time
reconciliation, which reduces the number of required staff and the potential for leakage and
corruption, would be an advantage of e-money. However, the program will only benefit from realtime reconciliation with reliable network signal.
The continued requirements for paper
documentation in addition to electronic records further weaken the envisioned potential efficiencies
and savings from real-time reconciliation. Third, agents are still learning the e-money processes and
have not consistently been prepared enough to disburse the money once recipients receive notice that
the money is available.
Bank Indonesia
TNP2K staff described Bank Indonesia as the champion of e-money in Indonesia, writing the e-money
regulations in 2014 and advocating the use of e-money for financial inclusion, particularly through G2P
38
At a January 2015 event hosted by TNP2K, the Indonesian Telecommunication Regulatory Authority cited political and
procedural roadblocks impacting signal strength in certain areas: some local regional governments have not allowed sufficient
investment in cell towers. They also require MNOs to renew their tower permits every two years, which carries heavy costs for
the MNOs. In some instances, if MNOs do not comply with the permit renewal requirements, local governments have torn down
the towers. MNOs are now advocating for relaxed regulation.
39
BFA conducted research with recipients with the following characteristics for this study:
Recipients in Semper Barat and Koja in North Jakarta, most recently receiving their payments through e-money
Recipients in Pasisir Selatan, south of Padang in West Sumatra, receiving their payments through Giro Pos payments at
PT Pos branches
Recipients in Padang, West Sumatra, just receiving their first payments through Giro Pos payments at PT Pos branches
in December 2014
Recipients in Bogor, south of Jakarta, receiving their payments through Giro Pos payments at PT Pos branches
6. Key Lessons
In analysing PKH, its payments evolution and its potential as a WFP partner for emergency cash
transfers, the following lessons emerge:
1. E-money infrastructure, agent networks and recipient understanding are nascent and, while
evolving, are currently key barriers to scaling G2P e-money payments. WFP should monitor emoney piloting and growth before adopting it as a reliable way to make emergency payments.
E-money, particularly as a means of delivering social assistance, is in its infancy in Indonesia.
Policy momentum is behind the e-money model and several promising policy developments indicate
that Indonesias payments infrastructure and the availability of e-money will grow and strengthen
over time. To reach scale, let alone to rely on e-money for emergency payments, the program and
PSPs have a number of items to examine, including:
E-money infrastructure mobile network and agent network - and its limitations
The complex e-payment payout processes
Recipients lack of e-money and mobile phone awareness and the best ways to educate
them
Agent preparedness, liquidity and payment process education
Recipient phone ownership
2. Until e-money infrastructure and processes are sufficiently robust, cash-based payouts via PT
Pos is likely the most if not only viable option for emergency payments.
The interviewed post office branches felt confident in being able to serve more recipients, as long
as they received sufficient notice to hire additional staff, such as in the case in Padang.
Additionally, recipients appeared comfortable with the PT Pos payment processes and the branch
locations, even if they had to wait hours for their payments. Furthermore, even if PKH increasingly
relies on e-money to pay recipients, PT Pos will continue to play an important role as cash payment
provider for the foreseeable future. Particularly in emergency situations, when even reliable
electronic payment infrastructure may be vulnerable to collapse, an emergency cash transfer
program requires a strong cash-based payment option. WFPs ability to leverage PSPs making cash
payments in the Philippines after Typhoon Haiyan is a prime example of this: With power down and
roads destroyed, WFP and its partner, the Pantawid Pamilyang Pilipino Program (4Ps), were not
able to make electronic payments, which typically comprise around 40 percent of all 4Ps payments,
in some of the affected areas. Since the 4Ps already used cash and electronic payments, WFP and
the program were able to coordinate with PSPs to choose the best payment types to effectively
deliver money to recipients in different areas.
3. Stakeholders are increasingly focused on financial inclusion and supporting G2P e-money
payments, which will influence the trajectory of G2P payment modalities and could, thus,
influence the feasibility of a WFP partnership.
TNP2K, the Ministry of Social Affairs, Bappenas, BI and BNPB all appeared eager to modernize and
improve G2P systems toward electronic and preferably financially inclusive payment schemes, and
recognize that these improved systems can and should be used for emergency and disaster
relevant beneficiaries in rural and urban areas?40 Does the program have a database that is
comprehensive, inclusionary and up-to-date?
Program is ready to embrace emergency response partnership with WFP. Are the program
and supporting stakeholders prepared to partner on an emergency cash transfer initiative? Do
staff appear willing to (and perhaps compensated for) work additional hours, such as in
emergency situations? Are staff available to deliver messages to recipients when
necessary? (Do they?)
Table 4 lists the criteria and rates how PKH aligns with the criteria based on a scale of red, yellow and
green circles. Red indicates that PKH and WFP do not align; yellow indicates they align somewhat; and
green indicates that they align significantly.
Align
significantly
Align
somewhat
Do not align
Table 4: How PKH Aligns with WFP Key Criteria
Criteria
Rating
Program has effective
relationship with the PSPs.
40
Comments
PKH has a longstanding relationship with PT Pos,
which is updating G2P accounts to include store of
value (to keep up with government expectations).
The program is also open to relationships with emoney providers to create the most efficient
processes. At the head office level, timely
payments did not appear to be an issue, but nearly
all e-money and PT Pos recipients interviewed
mentioned they did not receive payments for the
first half of 2014.
Partnering with PT Pos, PKH appears to have the
ability to add recipients in a brief timeframe, as
demonstrated in Padang. However, PT Pos claims
that only paying recipients quarterly (rather than
bi-monthly, for example), provides it with
sufficient time between payments to prepare.
Natural disasters are not predictable events that
offer months to coordinate and prepare payments.
PT Pos has in place the necessary infrastructure for
making scaled G2P payments and has even
remained open during past natural disasters.
Meanwhile, e-money providers continue to develop
their agent networks and mobile infrastructure.
However, while all three providers appear to be
relatively low-cost compared to PSPs from cash
transfer programs in other middle- and low-income
countries, PT Pos fees are nearly two times higher
than the e-money providers fees.41
Recipients interviewed in urban and rural areas
appeared comfortable with PT Pos payments,
despite the long lines. E-money recipients
The research team used program size as a criteria in earlier stages of the project in determining which program to study in
depth.
41
For a comparison of transaction fees across select low- and middle-income countries, see Annex 3.
Rating
Comments
experienced challenges with the e-money program,
many of which they are likely to overcome if they
continue to receive e-money payments.
The Unified Database is significant, covering the
bottom 40 percent of Indonesias socio-economic
strata. However, data are now more than three
years old, with research suggesting that exclusion
errors and other missing indicators exist, which
may pose challenges in leveraging it in emergency
situations. The timeline for updating it is
apparently approaching. PKH serves recipients in
urban and rural areas but reaches significantly
fewer than other government programs such as
KKS, and unconditional cash transfer program, and
Raskin, a rice subsidy program.
PKH staff play a key communicator role between
PKH and recipients; those interviewed appeared to
be cautiously willing to support emergency
payments. However, PKH stakeholders focus on emoney and financial inclusion and the programs
quarterly payments schedule may conflict with
WFPs priority of rapidly getting cash into the
hands of those affected by disasters.
PKHs alignment with the criteria suggest that it remains a potential partner for WFP, but not the only
one. In order for WFP to further evaluate its options for emergency cash transfer partners, the
researchers recommend the following actionable steps for WFP.
Host workshop on the potential of G2P payments for emergency preparedness in Indonesia with
government players including Bappenas, BNPB, TNP2K, Ministry of Social Affairs, BI and OJK.
Use the workshop as an opportunity to (a) become familiar with all the stakeholders as they
become familiar with WFPs interest in leveraging G2P schemes; (b) understand the
stakeholders roles in G2P payments and emergencies; and (c) discuss how and when to
improve the Unified Database.
Approach and establish relationships with the Ministry of Social Affairs, TNP2K and Bappenas.
As the stakeholders that appeared most willing to explore a partnership with WFP on
emergency cash transfers, they will be WFPs most likely champions for any implementation.
If WFP is anxious to establish a relationship with a PSP in the short-term, approach PT Pos to
introduce the idea of partnering on emergency cash transfers to gauge their interest,
commitment and financial expectations.
As Indonesia currently lacks a cash and vouchers (C&V) working group, play a leadership role in
facilitating a cross-sector dialogue on cash and vouchers in Indonesia, particularly considering
the potential opportunities and challenges of e-money and branchless banking options, to
explore additional opportunities for partnerships.
Meet with TNP2K to discuss how WFP might get involved in strengthening the Unified Database,
with an eye toward emergency response targeting. TNP2K (along with Bank Indonesia) may also
be interested in exploring ID verification systems, such as UNs Scope system or other
biometrics, that could replace recipients using PINs and pass codes to receive e-money
payments.
Using the above criteria, evaluate how programs such as KKS and Raskin align with WFPs needs
as compared with PKH. One way to evaluate these programs would be to conduct a pilot with
Bappenas that provides e-payments via the new nutrition cards connected to the KKS scheme,
or that experiments with electronic payments for Raskin. According to Bappenas, all PKH
recipients should also receive Raskin as a matter of course (though this is not supported by
findings from the recipient research).
Conclusion
PKHs e-money pilots could be the first step toward a robust and competitive system that offers a
range of payment mechanisms. However, the current status of the program would make leveraging the
system in a post-natural disaster or other emergency environments difficult payments just do not get
to recipients in a timely manner. Because it would benefit from improved local capacity in targeting
and payment, WFP can take a leadership role and engage with the Government to identify priority
areas for funding and training support.
3.5%
42
Data for Brazil, Colombia, Mexico and South Africa comes from CGAPs Focus Note 77: Bold, Chris, David Porteous and
Rotman. Social Cash Transfers and Financial Inclusion: Evidence from Four Countries.
Washington, February
http://www.cgap.org/sites/default/files/Focus-Note-Social-Cash-Transfers-and-Financial-Inclusion-Evidence-from-FourCountries-Feb-2012.pdf
Data for Haiti, Kenya, Philippines and Uganda comes from CGAPs Focus Note 93: Zimmerman, Jamie, Kristy Bohing and
Rotman.
Electronic G2P Payments: Evidence from Four Lower-Income Countries.
Washington, April
http://www.cgap.org/sites/default/files/Focus-Note-Electronic-G2P-Payments-April-2014.pdf
Data for Indonesia comes from interviews conducted by BFA in December 2014.
Sarah
2012.
Sarah
2014.
Colombia
Haiti
Program and
date data
gathered
Familias
en Accion
(2011)
Ti
Maman
Cheri
(2013)
% electronic
payments43
Number of
recipients
Payment
frequency
Average
grant per
recipient
Weighted
average fee
per payment
As % of
average
grant
Rates used in
conversion
43
Uganda
South
Africa
Mexico
Indonesia
- PT Pos
Kenya
Indonesia
- Bank
Mandiri
Brazil
Philippines
Indonesia
- BRI
SAGE
(2014)
Child
Care, Old
Age
Pension
(2011)
Oportunidades
(2011)
PKH
(2014)
WFP Cash
for
Assets
(2013)
PKH (2014)
Bolsa
Familia
(2011)
4Ps (2014)
PKH
(2014)
91%
31%
80%
100%
34%
0%
100%
100%
99%
41%
100%
2.4 million
75,000
95,000
9 million
5.8 million
2.8 million
62,000
1,304
12.9
million
4.5 million
485
Monthly
Bi-monthly
Quarterly
Bi-monthly
Bimonthly
Bimonthly
Monthly
Bi-monthly
Quarterly
Monthly
Quarterly
$55.10
$15.00
$19.34
$144.70
$118.20
$36
$34.12
$36
$71
$63.01
$36
$6.24
$1.36
$0.68
$3.5
$2.52
$0.72
$0.53
$0.48
$0.84
$0.75
$0.40
11.3%
9.1%
3.5%
2.4%
2.1%
2%
1.6%
1.3%
1.2%
1.2%
1.1%
COP
1,784.50
HTG 40
UGX
2,585
ZAR 7.20
MXN 12.40
IDR 12,484
KES 85
IDR 12,484
BRL 1.62
PHP 44.44
IDR
12,484
Electronic payments refer to payments initiated electronically by PSP to pay recipient via debit card or mobile money by depositing money into an account accessible to the
recipients. The accounts may have limitations around the length of time funds may be stored, the infrastructure at which recipients may withdraw the funds or whether recipients
may use the account for additional financial activity.
Organization
Alliance for Financial Inclusion (AFI)
Bank Indonesia
Bank Mandiri
Better Than Cash Alliance (BTCA)
Bank Rakyat Indonesia (BRI)
e-MITRA
Independent Consultant
Ministry of Social Affairs
National Board for Disaster Management (BNPB)
PT Pos
State Ministry of National Development Planning (Bappenas)
The National Team for the Acceleration of Poverty Reduction
(TNP2K)
USAID
WFP Indonesia Country Office
References
Bold, Chris, David Porteous, and Sarah Rotman. Social Cash Transfers and Financial Inclusion: Evidence
from Four Countries. Focus Note 77. Washington, D.C.: CGAP, February 2012.
http://www.cgap.org/sites/default/files/Focus-Note-Social-Cash-Transfers-and-Financial-InclusionEvidence-from-Four-Countries-Feb-2012.pdf
DRAFT Emergency Logistics Enhancement: BNPB-WFP XXX-Year Joint Strategy. WFP draft of May 11,
2014.
GSMA Intelligence 2014: Data Dashboard. Data from Q4 2014.
https://gsmaintelligence.com/markets/1531/dashboard/
Human Development Index, 2013 rankings. http://hdr.undp.org/en/statistics/
Implementing Mobile Money Interoperability in Indonesia. GSMA, 2013.
http://www.gsma.com/mobilefordevelopment/wp-content/uploads/2013/10/Implementing-mobile
money-interoperability-in-Indonesia.pdf
International Policy Centre Policy Research Brief 42. Originally from Ministry of Social Affairs, PKH
Profile, 2013. http://www.ipc-undp.org/pub/IPCPolicyResearchBrief42.pdf
Sandra Lawson et al. Beyond the BRICs: A Look at the Next 11. Goldman Sachs, 2007.
http://www.goldmansachs.com/our-thinking/archive/archive-pdfs/brics-book/brics-chap-13.pdf.
Oxford Policy Management (OPM). 2012. Disbursement of Social Cash Transfers through Bank
Accounts. Jakarta, Indonesia: The National Team for the Acceleration of Poverty Reduction (TN2PK).
Program Keluarga Harapan (PKH): Indonesian Conditional Cash Transfer Program. IPC, 2013.
http://www.ipc-undp.org/pub/IPCPolicyResearchBrief42.pdf
Program Keluarga Harapan Payments through Alternative Channels: Strategy and Key Requirements.
TNP2K Working Paper 22 2014.
http://www.TNP2K.go.id/images/uploads/downloads/WP%2022%20final.pdf
The Structure of Indonesias Telecoms Industry. Redwing, 2012-2014. http://redwingasia.com/context/telecoms-industry-structure/
Terms of Reference: Indonesia: An Evaluation of WFPs Portfolio (2009-2013) from WFPs Office of
Evaluation.
TNP2K & Spire Research and Consulting. Monitoring and Evaluation of Digital Payments Services for a
Pilot of Payment of PKH Beneficiaries. Presentation. January 29, 2015.
Stephen Turner et al. Country Portfolio Evaluation: Indonesia: An evaluation of WFPs Portfolio, 20092013. Inception Report. March 2014.
World Bank. 2012. Automated Teller Machines (ATMs) (Per 100,000 Adults). Washington, D.C.: World
Bank. Accessed 7 January 2015. http://data.worldbank.org/indicator/FB.ATM.TOTL.P5
World Bank. 2012. Commercial Bank Branches (per 100,000 adults). Washington, D.C.: World Bank.
Accessed 7 January 2015. http://data.worldbank.org/indicator/FB.CBK.BRCH.P5
World Bank. 2013. GDP (Current US$). Washington, D.C.: World Bank. Accessed 7 January 2015.
http://data.worldbank.org/indicator/NY.GDP.MKTP.CD
World Bank. 2013. GDP per capita (Current US$). Washington, D.C.: World Bank. Accessed 7 January
2015. http://data.worldbank.org/indicator/NY.GDP.PCAP.CD
World Bank. 2011. GINI Index. Washington, D.C.: World Bank. Accessed 11 March 2015.
http://data.worldbank.org/indicator/SI.POV.GINI
World Bank. 2011. Literacy Rate, Adult Total. Washington, D.C.: World Bank. Accessed 7 January
2015. http://data.worldbank.org/indicator/SE.ADT.LITR.ZS
World Bank. 2013. Population Ages 0-14 (% of Total). Washington, D.C.: World Bank. Accessed 7
January 2015. http://data.worldbank.org/indicator/SP.POP.0014.TO.ZS
World Bank. 2013. Population Ages 15-64 (% of Total). Washington, D.C.: World Bank. Accessed 7
January 2015. http://data.worldbank.org/indicator/SP.POP.1564.TO.ZS
World Bank. 2013. Population in the Largest City (% of Urban Population). Washington, D.C.: World
Bank. Accessed 7 January 2015. http://data.worldbank.org/indicator/EN.URB.LCTY.UR.ZS
World Bank. 2013. Urban Population (% of Total). Washington, D.C.: World Bank. Accessed 7 January
2015. http://data.worldbank.org/indicator/SP.URB.TOTL.IN.ZS
World Bank. 2013. Mobile Cellular Subscriptions. Washington, D.C.: World Bank. Accessed 7 January
2015. http://data.worldbank.org/indicator/IT.CEL.SETS
World Bank Findex. 2011. Account at a Formal Financial Institution (% age 15+). Washington, D.C.:
World Bank. Accessed 7 January 2015. http://datatopics.worldbank.org/financialinclusion/
World Bank Findex. 2011. Debit card (% age 15+). Washington, D.C.: World Bank. Accessed 7 January
2015. http://datatopics.worldbank.org/financialinclusion/
World Bank Findex. 2011. Mobile Phone Used to Pay Bills (% age 15+). Washington, D.C.: World Bank.
Accessed 7 January 2015. http://datatopics.worldbank.org/financialinclusion/
World Bank Findex. 2011. Mobile Phone Used to Receive Money (% age 15+). Washington, D.C.: World
Bank. Accessed 7 January 2015. http://datatopics.worldbank.org/financialinclusion/
World Bank Findex. 2011. Mobile Phone Used to Send Money (% age 15+). Washington, D.C.: World
Bank. Accessed 7 January 2015. http://datatopics.worldbank.org/financialinclusion/
Zimmerman, Jamie, Kristy Bohling and Sarah Rotman. Electronic G2P Payments: Evidence from Four
Lower-Income Countries. Focus Note 93. Washington, D.C.: CGAP, April 2014.
https://www.cgap.org/sites/default/files/eG2P_Philippines.pdf