Open AccessBoosting financial inclusion through social assistance reform: evidence-based approach in selecting a payment system
Author(s) -
Hilman Palaon,
Sudarso Kaderi Wiryono,
Taufik Faturohman
Publication year - 2020
Publication title -
enterprise development and microfinance/enterprise development and microfinance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.209
H-Index - 17
eISSN - 1755-1986
pISSN - 1755-1978
DOI - 10.3362/1755-1986.20-00013
Subject(s) - disbursement , financial inclusion , payment , voucher , business , government (linguistics) , cash , finance , revenue , debit card , bank account , mobile payment , savings account , credit card , economics , public economics , financial services , accounting , linguistics , philosophy
Digitizing social assistance for the poor has been proven to increase financial inclusion. The Indonesian Government initiated reform for non-cash social assistance disbursement in 2016. Evidence-based policy approach is an effective technique for informing the government on appropriate new regulations. A pilot project involving 4,295 participants was conducted to evaluate the following payment systems: debit card, mobile money, QR code (quick response), and NFC (near field communication). Beneficiaries utilized the funds for cash withdrawals and food purchases at bank agents. Quantitative and qualitative methods were employed in the analysis. The government decided to use debit card with multiple wallet features. A new regulation was made to support the implementation in 2017, and by the end of 2019, the government provided more than 12 million new savings accounts to the poor. Potential future improvements are proposed for the sustainability of the solution, which include a disbursement providers’ revenue model, broader financial services involvement, bank agents’ inventory system, and optimizing the latest innovations.