Assessment of Potential WFP G2P Partner Programs in Indonesia

World Food Programme
27 April 2015
Page 1 of 34
Evaluating Partnerships with Existing National Safety Nets for

Emergency Payments:
Assessing the Potential for WFP Engagement in Indonesia with an Existing
Government Safety Net
Date: April 27, 2015
BFA, LLC
259 Elm Street, Suite 200, Somerville, MA 02144 USA
Phone: + 617 628 0711 Fax: + 617 336 7455 www.bankablefrontier.com

27 April 2015
Page 2 of 34
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?

27 April 2015
Page 3 of 34
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)

27 April 2015
Page 4 of 34
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

27 April 2015
Page 5 of 34
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
AFI
BI
BRI
BFA
BLSM
Raskin
BPS
KKS
OJK
PSP
G2P
IDR
KYC
MNO
BNPB
TNP2K
4Ps
PKH
SGLK
Bappenas
WFP

27 April 2015
Page 6 of 34
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.

27 April 2015
Page 7 of 34
Criteria
PKH and the PSPs have
the flexibility to make
additional payments or
add more recipients.
PSP has access to
sufficient
infrastructure to make
payments that are
relatively low-cost to
the program.
Recipients trust the
PSP to pay them the
correct amounts on
time at a reasonably
convenient location.
Program serves a
significantly large and
inclusive group of
recipients, likely to be
affected by natural
disasters or other
emergencies.
Program is ready to
embrace emergency
response partnership
with WFP.
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.

27 April 2015
Page 8 of 34
1. The Indonesia Context6

Indonesia had a GDP per capita of US$3,475 in 2013, up from US$2,947 in 2010; it ranked 108 out of 187
countries on the Human Development Index in 2013.7 In 2007, Goldman Sachs recognized Indonesia as
one of the Next 11 countries (following Brazil, Russia, India and China, the BRICs) to gain economic
stature globally, based on its increasing urbanization, infrastructure investment, life expectancy rates,
technology adoption and energy consumption. 8 Indonesias economy remained strong through the
global recession and, recognized by the World Bank as a Middle-income Country, it is Southeast Asias
largest economy (Exhibit 1).9 However, inequality has increased in recent years. The GINI index has
risen from 34 in 2008 to 38 in 2011.10
Exhibit 1: GDP of ASEAN countries, 2012
1,000
Current US$ (billions, 2012)
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.

27 April 2015
Page 9 of 34
programs address food insecurity caused by lack of purchasing power for food. The largest social
safety net directly targeting food consumption is the Beras untuk Rakyat Miskin (Raskin) Program,
aimed at helping poor households to fulfill their food needs and reduce their financial burden by
providing 15 kilograms of rice per month, at a subsidized price that is about one-third of the market
price. The program targeted 17.5 million households in 2012. 12
Natural Disaster Management

The Centre for Research and Epidemiology of Disasters ranks Indonesia as one of the five countries
most frequently hit by natural disasters.13 As the worlds largest archipelago, with more than 18,000
islands, the country has suffered from natural disasters including earthquakes, tsunamis, floods and
volcanic eruptions. WFP estimates that, on average, disasters affect one million Indonesians per year
and, over the last 10 years, Indonesia has experienced 150 severe natural disasters. 14 The Government
and its international partners therefore have a continual focus on natural disaster preparedness,
management and relief.
According to Indonesias National Board for Disaster Management (BNPB), Indonesia experiences an
average of IDR 30 trillion (US$2.4 billion) worth of damage and loss from natural disasters and
emergencies each year. The budget for disaster preparedness and management has increased 2,680
percent since 2008, to IDR 15 trillion (US$1.2 billion), but BNPB argues that it needs five times that
amount to effectively manage all disasters each year. It wants one percent of the national budget per
year allocated for preparedness and management.
Within its disaster preparedness and management budget, BNPB allocated IDR 3 trillion (US$240
million) for its response budget, IDR 1.5 trillion of which is allocated for post-disaster support and IDR
1.5 trillion for on-call budget to send to local governments in cases of emergency.15 BNPB views
direct cash transfers to affected people as a promising means to providing a mechanism for
reconstruction and resiliency of individuals and communities.16 For example, internally displaced
persons (IDPs) often stay in shelters for extended periods of time without work, so BNPB has
implemented cash for work or other cash transfer schemes that allow the IDPs to purchase needed
goods, pay rent or rebuild their rice fields.
Importantly, BNPB uses its own database separate from the Ministry of Social Affairs Unified
Database for targeting for emergency responses. (Regional level governments and approximately 20
national level ministries use the Unified Database, as well.) BNPBs targeting system aggregates
information from the social ministry, health ministry, army, police, search and rescue and public
works for needs assessments, response activities and priorities. BNPB also coordinates with NGOs on a
refugee database (which must include name, date of birth, gender, address and any special
designations such as elderly or pregnant). And it collects daily reports of needs in affected areas
during disaster situations. However, BNPB acknowledged that its database is not complete and
would benefit from improvements in coverage, indicators and maintenance, which would enable them to
quickly and easily coordinate in emergency situations.
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.
14
15
16
For more on BNPBs interest in cash transfers for disaster management, see Annex 1.
13

27 April 2015
Page 10 of 34
emergency response capacity and ensuring WFP preparedness to render operational support to the
Government in medium- and large-scale emergencies.17
Financial Infrastructure for Electronic Transfers

Indonesias population dispersion across over 13,000 islands makes financial access a challenge. In
2012, Indonesia had 9.6 bank branches for every 100,000 adults and 36.5 automated teller machines
(ATMs), significantly lower than Thailand, Singapore and Malaysia and similar to the Philippines. Also,
10.5 percent of Indonesian adults had a debit card and 19.6 percent had an account at a formal
financial institution, fewer than most ASEAN peers.18 Table 1 shows how Indonesias numbers compare
to other ASEAN countries.
Table 1: Financial Access in ASEAN Countries, 2011
ATMs per
Commercial bank branches
Country
100,000 adults
per 100,000 adults
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
ATM + Debit Card Purchases
2009
2010
E-Money Transactions
2011
2012
Credit Card Transactions
Source: Bank Indonesia, 2014. http://www.bi.go.id
17
18
2013
World Bank. 2012. http://data.worldbank.org/indicator. Full references in References.

27 April 2015
Page 11 of 34
Indonesia has seen an increase in mobile cellular subscriptions in recent years. Indonesia had 211.3
million mobile cellular subscriptions in 2010 (for a total population of 241 million), which rose to 282
million subscriptions in 2012 for 247 million people and 303.7 million in 2013 for 250 million people.19
GSMA reported SIM penetration to be 121 percent in 2014.20 A majority of consumers subscribe with
the leading three mobile network operators (MNOs), Telkomsel, Indosat and XL Axiata, though eight
other MNOs are also in the market.21
In 2007, Telkomsel was the first MNO to launch an e-money product, TCash, followed by Indosat in
2008. The government introduced its first e-money regulations in 2009. XL launched an e-money
product in 2012, while smaller MNOs and banks also launched e-money products. In 2013, the big three
MNOs partnered to enable customers to send money across each others networks, although
interoperability among most banks and agents does not yet exist. 22 Indonesians use of mobile phones
for payments is still nascent; while e-money products have been in the Indonesian market since 2007,
the World Banks Findex database revealed that less than one percent of adults used their mobile
phone to pay bills, receive money or send money in 2011.23
The central bank (Bank Indonesia, or BI) is a member of the Alliance for Financial Inclusion (AFI) and
has promoted a less cash policy with a particular focus on financial inclusion, notably in the latest
branchless banking regulations from 2014. Progress has been slow: BI launched branchless banking
pilots in 2012, only to abandon them in 2013 due to regulatory confusion created when the government
formed the Financial Services Authority (OJK, a quasi-independent entity) and put branchless banking
under its purview rather than BIs. Digital financial services continue to be regulated by BI.
As a core promoter of the governments less cash policy, BI has played a central role in advocating
for e-money-based G2P disbursements as a means of achieving a shift to electronic payments and
enabling financial inclusion in Indonesia.
Evolution of Cash Transfers Schemes

Indonesias first conditional cash transfer (CCT) program, Program Keluarga Harapan (PKH), launched in
2007 as part of the Governments national poverty reduction strategy, provides cash transfers to 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.24
The National Team for the Acceleration of Poverty Reduction (TNP2K), an ad hoc body convened by the
office of the Vice President, plays a central role in the push to modernize social transfers in Indonesia.
It led the creation of the countrys Unified Database, with technical assistance from the World Bank.25
In 2011 the Bureau of Statistics (BPS) collected 40 variables related to individual, family and household
conditions, using a national survey. It ranked the households to prioritize and select them for social
protection programs. The bureau identified and prioritized forty percent of the Indonesian population
through this exercise.
The Unified Database currently contains 96 million individuals among approximately 25 million
19
World Bank. 2013. http://data.worldbank.org/indicator. Full reference in References.

GSMA Intelligence 2014: Data Dashboard. Data from Q4 2014. https://gsmaintelligence.com/markets/1531/dashboard/
21
The Structure of Indonesias Telecoms Industry. Redwing, 2012-2014. http://redwing-asia.com/context/telecoms-industrystructure/
22
Implementing Mobile Money Interoperability in Indonesia. GSMA, 2013. http://www.gsma.com/mobilefordevelopment/wpcontent/uploads/2013/10/Implementing-mobile money-interoperability-in-Indonesia.pdf
23
World Bank Findex. 2011. http://datatopics.worldbank.org/financialinclusion/. Full reference in References.
24
25
For more information on the background, objectives and functions of the Unified Database see:
http://www.TNP2K.go.id/en/frequently-asked-questions-faqs/unified-database/
20

27 April 2015
Page 12 of 34
households.26 Regional level governments and national level ministries can choose to use the database
but are not required to do so. TNP2K intended to update the database every three years. As of
December 2014, TNP2K was reviewing the next survey, which may include questions about households
banking and financial services practices.
To date, only banks and PT Pos, the national post office, have been authorized to act as payment
service providers (PSPs) for G2P payments. The Ministry of Finance sets all rules around authorized
G2P PSPs via a decree, which it updates periodically. The State Ministry of National Development
Planning (Bappenas) and Bank Indonesia anticipate changes to the decree that would expand the pool
of authorized payers to include e-money issuers, such as MNOs.
Indonesias newest cash transfer program is the Family Welfare Deposit Scheme (KKS), which intends to
reach 15.5 million recipients. Launched in November 2014, it 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. Every other month, Bank Mandiri, one of the four largest banks in
Indonesia, pays one million recipients via e-money and PT Pos pays the other 14.5 million recipients.
The program leverages the Unified Database to target and manage recipients. Annex 2 provides more
details about the program.
2. Program Keluarga Harapan (PKH) The Family Hope Program

Background
The Ministry of Social Affairs launched PKH as a pilot in 2007. The program served 388,000 recipients
across seven provinces, and it quickly shifted from a pilot to permanent social safety net program.
However, PKH has been slower to scale than many expected: between 2007 and 2010 the program
barely doubled in size. By the end of 2014, PKH had reached 2.8 million (87 percent) of the 3.2 million
recipients it intended to target; it intend to reach four million recipients by the end of 2015.
According to TNP2K, the program aspires to eventually reach the poorest 40 percent of the population
across all 497 districts and provinces in the country, approximately 7.2 million households.
250
200
6
5
150
4
100
3
2
50
1
0
No. of households (millions)
26
Budget (million US$ PPP)
No. of households (millions)
Exhibit 3: PKH Growth, 2007-2012
Budget (million US$ PPP)
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.

27 April 2015
Page 13 of 34
Source: International Policy Centre Policy Research Brief 42. Originally from Ministry of Social Affairs, PKH Profile, 2013.
Primary access provides number of households and secondary axis provides the budget numbers. Budget numbers beyond 2012
were not available.
Table 2: PKH Overview

Payment Frequency
Payment Amount
Every 3 months (4 times per year)

Variable; up to a maximum of IDR 2.8 million (US$224.28) per
household per year
Population Targeted
Poor and ultra-poor households with school-aged children
(target of reaching bottom 40% in all districts and provinces)
# Recipients Currently Served
2,797,574 (approximately 8% of the lowest income group)
Disbursement Types
2,486,299 (88.87%) via PT Pos Giro Pos (described below)
309,486 (11.06%) via PT Pos Pos Wesel (community
payouts; described below)
1,304 (0.05%) via e-money at Bank Mandiri
485 (0.02%) via e-money at BRI
Geographic Areas Covered
Across all 33 provinces
Targeting Method
Proxy means testing conducted by BPS until 2011. Since 2012,
the Unified Database, which also identifies recipients of
Raskin and KKS.
Focus on Nutrition or Food No; focus on health and education
Security?
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

27 April 2015
Page 14 of 34
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
3. PKH Payments Implementation and PSP Experiences

Each year, the Ministry of Social Affairs contracts a PSP for PKH through a tender. Only PT Pos and
large regulated commercial banks qualify to apply. With the exception of two years in which Bank
Rakyat Indonesia (BRI) and PT Pos shared the payments portfolio, PT Pos has been the only PSP to
apply. Due to the lack of presence of other qualified PSPs outside of Java, it always wins the contract.

27 April 2015
Page 15 of 34
However, as PKH has grown, it has begun to digitize its payments. Following the e-money regulations
of 2014, PKH saw an opportunity for the banks to improve their service and launched a new pilot, with
the support of TNP2K, using e-money. PKH and TNP2K invited Bank Mandiri and BRI to partner on the
pilot as soon as the banks received approval from Bank Indonesia to introduce e-money products. The
partners now make e-money payments to a combined total of nearly 2,000 recipients, all of whom have
been with the program since 2007 and are familiar with the program. 28
Table 3: Comparing PKH PSPs
Features
PT Pos
Payment Type
Giro Pos & Pos Wesel
Deposit Amount & Frequency Quarterly payments, up
million per year
# of Recipients Served
2,795,750
Geographic Areas Covered All 33 districts
Withdrawal Fee
Minimum Balance
None
None
Pay Points (Type and

Number)
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
IDR 9,000 (US$0.72)
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)
IDR 5,000 (US$0.40)
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.
PT Pos PKH Payments

PT Pos is the governments longest running G2P payments partner. It has partnered with PKH since the
programs launch in 2007. It has 4,000 post offices in mostly rural areas throughout Indonesia, and it is
the only PSP that can effectively execute G2P payments countrywide.
Since 2011, PT Pos has used its bulk payment system called Giro Pos. Money goes into non-financial
accounts: recipients do not receive a card or passbook and they cannot deposit money into the
accounts.
PT Pos uses an extensive scheduling system to manage its payments. The payouts at PT Pos branches
typically occur as follows:
1. Based on the master schedule, PT Pos coordinates with the local government, which relies on
facilitators to communicate the payment schedules to recipients.
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.

27 April 2015
Page 16 of 34
2. PKH sends both the money for the payments and all necessary payroll information based on its
database to the PT Pos head office.
3. The PT Pos head office executes the payroll process and transfers the funds to the local offices
through the SGLK system.
4. Group leaders or program officers notify recipients when the payment will arrive, which is
typically two to seven days after the notification.
5. Recipients travel to their nearest PT Pos branch at a time designated by their program officer.
6. At the PT Pos branch, the program officer or group leader takes recipients national IDs and
PKH cards, completes one paper withdrawal slip per recipient and submits the slips for the post
office staff to process.
7. Post office staff process the paperwork and call recipients to give them their money.
8. Staff record each payment into the Giro Pos system, which allows payment reconciliation
online and in real-time. However, recipients still need to fill out paper withdrawal slips at
each transaction.
Technically, recipients can keep money in their accounts, but this is not well known or understood. In
response to the governments focus on financial inclusion for G2P recipients, PT Pos recently tried to
educate PKH recipients on their Giro Pos account features. But this effort slowed down PT Pos staffs
processing of PKH payments as post offices filled with recipients, so staff abandoned it. PT Pos aims to
transition recipients to more traditional financial accounts and is working to obtain approval from BI
for a license to interoperate with the banking system. 29 Stakeholders interviewed from PKH, Bappenas
and Bank Indonesia contend that PT Pos G2P payment system needs to be modernized. However, PT
Pos considers itself the most viable option for G2P distribution in the country. It cites that the banks
currently authorized to disburse G2P payments have the technology but lack the capacity and
infrastructure necessary to deploy payments at scale everywhere in the country. PT Pos earns IDR
9,000 (US$0.72) per transaction, 33 percent more per transaction than that charged by banks.
However, at two percent of the average grant amount, PT Pos fee as a proportion of grant is similar to
national G2P programs in South Africa, Mexico and Kenya (Annex 3).
PT Pos staff said post offices face staffing and liquidity challenges with the monthly or bi-monthly
payments expected with the KKS system, and the quarterly PKH payments are more manageable and
allow branches to hire temporary staff for scheduled pay dates. This has implications for any
partnership with PT Pos in which WFP requires more frequent payments to recipients.
Despite PT Pos extensive reach across Indonesia, PKH includes recipients located more than 20
kilometers from the nearest PT Pos branch. In such cases where PT Pos determines that a significant
number of recipients must travel more than 20 kilometers to reach a branch, post office staff will
travel to the communities to make cash payments via Pos Wesel, or community payments, at
temporary pay points. PT Pos uses a paper-based manual recording and reconciliation system for its
community payments.
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.

27 April 2015
Page 17 of 34
branch will have to make the payments. Support would include additional staff and capital resources
(such as computers) and local government assisting facilitators with informing recipients.
E-Money PKH Payments

SIM Cards for Recipients
For the PKH e-money pilots, TNP2K elected to provide all e-money recipients with new SIM cards.
TNP2K cited the universality of Telkomsel SIM cards as a key reason for providing new SIM cards; a
number of recipients only had SIM cards from smaller providers not compatible with Bank Mandiris
system. Additionally, TNP2K found that fewer recipients than it expected had SIM cards in the first
place. As such, rather than surveying recipients about SIM card ownership for the e-money pilot,
TNP2K decided to provide new SIM cards to all recipients.30 Recipients minimal SIM card ownership is
something for WFP to take into account, especially in emergency situations when SIM card distribution
ahead of payment would risk being a clumsy, resource-intensive step.
The standard SIM to which PKH e-money accounts are linked requires minimum usage and balance to
stay active, an admitted oversight in the design of the payment mechanism. PKH has encountered
significant problems in its e-money pilot as recipients fail to use (or leave a balance) on their programregistered SIM cards, rendering the SIMs expired by the next payment date. For example, a BRI agent
served 99 recipients for the first e-money payout. However, she only served 51 recipients at the
second payout due to a number of recipients having expired SIM cards.31 After receiving reports from
facilitators and field staff on inactive SIMs, PKH must provide new SIMs to recipients with expired SIMs.
The program and government are hoping to resolve this issue in 2015, whereas KKS operations have
benefited immensely from an agreement with MNO partners to waive SIM activity requirements for five
years for all KKS SIM holders.
Recipients interviewed also complained about needing to pay for airtime in order for their SIM cards to
stay active. Interestingly, no one seemed to agree on how much they needed to spend. One group of
recipients said they should add IDR 10,000 (US$0.80) per month, another group said IDR 5,000
(US$0.40) per week. One woman pointed out that, only receiving IDR 125,000 (US$10) every three
months, the airtime plus the transport cost hardly made it worth getting the PKH payment.
Additionally, if the payments are delayed for any reason, this would require recipients to add more
airtime without receiving a PKH payment.
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.
BRI PKH Payments

In response to a government policy push to extend banking services to the unbanked and poor, BRI first
became a PSP in 2011, managing 100,827 PKH payments totalling IDR 35 billion (US$2.8 million) to
recipients via their Simpanan Tabunganku savings product. By 2012, BRI served 500,827 recipients (34
percent of total) who could retrieve their money at any of the 15 BRI bank branches or 120 bank units
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

27 April 2015
Page 18 of 34
(similar to a bank agent) in the covered areas. Although the recipients received their payments into
regulated bank accounts and could take advantage of the account features (e.g., safe place to store
value, interest on deposits), very few recipients actually did take advantage; rather, they typically
cashed out their payments in full.
PKH cancelled BRIs contract in 2013 due to challenges such as long lines at the pay points, challenges
verifying customer identities (know-your-customer, or KYC, requirements) arising from lost or damaged
IDs, poor customer service and unfulfilled expectations that BRI would deploy mobile ATMs to help
serve recipients faster. 33 PKH then relied exclusively on PT Pos for its growing number of payments.
When the e-money pilot opportunity arose in 2014, BRI agreed to participate again with PKH, using emoney accounts and its agent network. BRI served 485 recipients in Jakarta and East Java during the
pilot using 10 agents. According to BI, BRI already has 14,000 agents nationally and plans to grow its
agent network to 25,000 within the next two years.
BRI uses a proprietary electronic data capture (EDC) technology for the transactions. It relies on MNO
Telkomsel for enough signal strength to ensure online, real-time reconciliation. If the signal is weak or
the network goes down during payments, agents either wait or conduct their transactions offline and
reconcile manually. The EDC machine used for transactions is essentially a unique POS device solely
owned and operated by BRI to connect to and transact via their EDC system. To pay recipients, BRI
proceeds as follows:
1. BRI sends an SMS blast to recipients informing them that their payments are available.
2. Based on its program lists PKH sends both the money for the payments and all necessary payroll
information to the BRI head office.
3. The BRI head office then executes the payroll process and coordinates with agents to ensure
adequate liquidity at payouts.
4. Notified by SMS, recipients can withdraw their money at an agent, an authorized ATM or
supermarkets Aflamart and Indomart.34 As soon as they receive the SMS telling them that
money is available, recipients can go to cash out from ATMs, whereas if they go to an agent,
they must wait until their designated day.
5. At the agent, recipients request and receive pass codes sent via SMS message.
6. Recipients give pass code and phone number to agent, and agent enters phone number in EDC
machine.
7. Recipients input PIN, followed by the pass code.
8. Agent pays recipient and records on receipt paper.
9. BRI conducts and reconciles all transactions electronically and sends a data report to PKH for
monitoring.35
The government pays BRI by committing to deliver the total payment amount in advance of the
disbursement and by paying a per-transaction fee (which BRI splits with agents). Interestingly,
however, it charges the lowest transaction fee of the three PKH PSPs (IDR 1,000, or US$0.08, per
transaction less than Bank Mandiri and nearly half of what PT Pos charges). With the emphasis on emoney and payments innovation growing in the country, BRI also appears to be leveraging the e-money
pilot as an opportunity for product testing as it moves forward with its e-money and branchless banking
expansion strategy. BRI expressed no concerns over challenges of agent liquidity. However, one BRI
agent expressed concern with the banking technology: BRIs IT division trained her on the EDC machine
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.

27 April 2015
Page 19 of 34
three times, yet she claimed she would still prefer the BRI staff to be present during PKH payouts (as
they were for the first two payments) since she is still learning the machine.
BRI reported that recipients have trouble with the banking technology and with remembering their
PINs. The same BRI agent said that most of her recipients are older women who are unfamiliar with
operating mobile phones and do not own their own phones. She observed recipients giving their PINs to
her, to BRI staff or to PKH staff to enter into the EDC because they were not familiar with PINs, the
EDC or the mobile phone. She benefited from BRI and PKH staff being present during the payouts to
assist with these issues.
In Emergencies
One agent recommended making emergency payments in cash, rather than e-money, until the e-money
system is better established. Particularly due to recipients lack of familiarity with the mobile phones,
she also feared recipients would be confused and doubtful about the payments, which would cause
more work for the agents, bank staff and PKH staff. Nonetheless, she claimed to have sufficient
liquidity to serve additional recipients in times of emergency, and recommended that she would
benefit from (1) more staff to help pay recipients, (2) additional EDC machines to process payments
and, since she would likely be handling more money, (3) more security (particularly given the
emergency context).
Bank Mandiri PKH Payments

Bank Mandiri is a new partner for PKH, currently serving 1,304 recipients. It has previous experience
with G2P payments, having formerly served the Ministry of Religion to pay teachers via its electronic
bank account product. Similar to the BRI experience with delivering PKH payments through basic bank
accounts, Bank Mandiri struggled with crowded branches at times of payment and found little financial
benefit in the arrangement. It did not renew its contract with the Ministry of Religion and has largely
stayed out of the G2P space until its recent partnership with PKH and KKS to pay recipients through emoney, which the bank sees as a potentially lucrative business line. Bank Mandiri intends to recruit
10,000 agents in 2015, with the ultimate goal of having 25,000 agents by the end of 2016.
Bank Mandiris e-money product, available over USSD or smartphone app for users connected on any of
Indonesias three largest MNOs, features no minimum balance and no withdrawal fees for
accountholders. The Mandiri e-cash management system is web-based down to the agent level, such
that it depends on a strong network signal in order for the bank and its agents to access the accounts
and process and reconcile payments. The payment process is as follows:
1. Bank Mandiri sends an SMS to recipients informing them that their payments are available.
2. To process payments, the agent inputs recipients mobile phone numbers (one at a time) into
his/her laptop computer and then asks the recipients how much money they would like to
withdraw.
3. Recipients receive six-digit one-time passwords (OTPs) via SMS to their phones, typically with
assistance from the agent, which the agent inputs back into the computer.
4. The agent confirms the amount to pay the recipients.
5. The recipients receive transaction confirmations and balance notifications via SMS. The agent
also receives a transaction confirmation.
6. The agent records the withdrawal on receipt paper and in his notebook. 36
What is notably missing is the use of a PIN to ensure a secure payment. Mandiri reports that they do
not use PINs because recipients cannot remember them. After observing BRI, observed BRI recipients
challenges with PINs, Bank Mandiri decided it would pursue an alternative, potentially easier method
for recipients by using OTPs.
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.

27 April 2015
Page 20 of 34
Finding the Right Agents

As BRI and Bank Mandiri grow their agent networks, TNP2K evaluated the ideal criteria for agents.
Specifically, agents should be trusted in their communities, have liquidity, be in convenient locations
for the recipients and know how to use the banks technology. Interestingly for the pilot, the banks
brought the cash to the agents before they began payouts, rather than requiring the agents to provide
the cash up front and apply for reimbursement. The bank staff would assist the agents with the
payouts, complete the settlement reports and take excess cash back to the bank with them. While
such intensive intervention from bank staff may be helpful to ensure liquidity and quick settlement
while agents are trained and growing, these practices are costly, atypical and hence unsustainable in
agent-led financial services models.
The best examples of agents are retail shop owners who are reliably in their shops so that, if a
recipient cannot withdraw her money on the designated payout day, she can find the agent on another
day (and the agent would have enough money to serve her). Problems would arise with agents who are
village chiefs, for example. While community members may trust the chief, he would not have cash on
hand to serve recipients on any day; he would rely on the bank to bring the cash on payout days and
disburse it.37
Financial Inclusion and E-Money Accounts

Considering the government supports e-money G2P payments in order to promote financial inclusion,
BRI and Bank Mandiri e-money recipients reportedly can and are even actively encouraged to save some
of their payments in their e-money accounts. TNP2K reported that as much as 10 percent of recipients
kept money on their phones. One BRI agent reported serving some recipients who decided to keep a
portion of their payments in their phones. However, when the recipients asked to withdraw the money
on the next payment date, the agent could not disburse it. BRI told her that agents can only disburse
the cash amounts stated in the data given by the Ministry of Social Affairs (which would be equivalent
to the amount for one pay period per recipient). The agent was unclear whether and how the
recipients would be able to retrieve the money remaining in their accounts. TNP2K and PKH will surely
need to modify the systems based on such lessons from the pilot, and WFP will want to monitor this
situation as it seeks to partner with G2P programs using these payments methods.
4. Program Stakeholder Experiences & Perspectives on E-Payments

PKH
The 2014 approval of national e-money regulations broadened the possibilities for PKH partnerships
with banks for disbursing payments. However, bottlenecks still exist. First, the program reported that
onerous annual procurement processes cause payment delays, as the tender process must finish before
payments can go out. Although PKH envisions a scenario in which a variety of PSPs could serve the
program, drawn out tenders leading to delayed payments may only be exacerbated if the program
contracts with numerous PSPs. Second, the pilots have exposed some challenges to using traditional emoney services. For instance, the program reports that SIM cards are an expensive investment, despite
lower transaction fees for e-money payers, especially if recipients do not use their SIM cards frequently
enough and the SIMs expire. Third, recipients do not appear to grasp the e-money concept and are
prone to giving away or forgetting their PINs, causing concerns of security risks on the one hand, and
stalled or prolonged payout processes on the other.
Despite PKHs challenges with e-money and despite PKHs ongoing partnership with PT Pos, the PKH
director saw limitations with PT Poss current cash-based and non-financial system. The director saw
the new e-money and branchless banking regulations as an opportunity to expand the payment options,
particularly leveraging agent networks. Staff were also open to partnerships that leverage their
different cash disbursement methods in emergencies. However, they were at the same time quick to
37
Information gathered by MICRA at TNP2K-led workshop on the evaluation of e-money for PKH payments. January 2015.

27 April 2015
Page 21 of 34
note that the budget, internal capacities, current reach and the available infrastructure for e-money
are all lower than may be needed to do so in even non-emergency situations.
State Ministry of National Development Planning (Bappenas)

Bappenas is a staunch promoter of more effective and efficient government programs. It firmly
believes that electronic payments will reduce waste and leakage within government as well as provide
opportunities for more effective policies that link the Indonesian people with markets and services.
Yet it acknowledges that electronic payments are still in their infancy.
For PKH especially, it has observed that in some pilot areas, the network signal is still too weak, both
for BRIs EDC technology and Bank Mandiris web-based platform.38 Even where signals and
infrastructure are strong, staff acknowledged challenges with recipient capacity to use and understand
the new systems, such as forgetting and losing PINs and SIMs, or registering twice for the same account
or product.
Nonetheless, Bappenas finds the need for PKH to innovate and modernize as critical. PT Pos fees
continue to increase annually and, as coverage of the program continues to grow, Bappenas expressed
concerns that PT Pos fee increases will become i n c r e a s i n g l y unsustainable. The prospect of
paying via e-money agents is particularly appealing when the transaction fees charged are nearly half
of what is charged by PT Pos.
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.

27 April 2015
Page 22 of 34
payments. BI staff noted that their biggest investments toward the shift to electronic G2P payments
have been in p a y m e n t infrastructure and e - m o n e y a w a r e n e s s a n d f i n a n c i a l education
initiatives, for both the recipients and for the new e-money agents.
BI staff expressed their satisfaction with the gradual approach PKH is taking to its e-money pilots, such
as conducting agent training and recipient awareness building activities one month in advance of the
first payments. However, they believe more could be done through this process to facilitate awareness
and capabilities of agents and recipients. For instance, they note that PKH facilitators and agents are
on the front lines, but they are not consistently trained and may be confused about who is responsible
for recipients registering, transacting and understanding the e-money based payments process.
Additionally, BI raised questions about to whom recipients turn when they have problems with their emoney-based payments.
5. Recipients Experiences with E-Money and PT Pos

PKH reaches people of diverse backgrounds in rural, peri-urban and urban areas with different terrains
and economic activities and who are at risk for different natural disasters, including flooding,
earthquakes and tsunamis.39 The majority of recipients did not own their own cell phone and few had
bank accounts or had ever used an ATM. Some recipients (both e-money and PT Pos) saw the payment
as a gift and did not feel that they are in a position to complain when something goes wrong with a
payment. One group said they were not even sure to whom they should complain.
Surprisingly, recipients did not complain about the late payments which were six months late for
several e-money and PT Pos groups interviewed. All the groups emphasized their reliance on PKH to
pay for school costs, such as exams, new semester fees and uniforms and supplies, and they were even
able to borrow against the PKH payments. However, the quarterly frequency of payments caused
recipients to rank them as less reliable and important than their income from employment, typically
casual labor and micro businesses.
PT Pos recipients did not know they could keep money in their account, though several recipients
expressed interest in keeping money in the account. E-money recipients interviewed for this study said
they do not keep money in their account, in part because they are afraid that the government will take
away the amount they leave in and then exclude them from the program. Few other recipients
claimed they would prefer receiving payments through the bank because it is easy to reach, but they
were afraid to have an account, as they did not want to pay administrative and maintenance fees.
While PT Pos recipients said they would be interested in receiving their payments via e-money, few of
them either owned or were comfortable operating a cell phone. The recipients were willing to use
whatever payment method was necessary to receive their payments and they assumed (without any
mention or probing from the researchers) that an e-money agent would be more conveniently located
and more quickly able to process payments than PT Pos. Ultimately, the recipients responses
underline that their biggest constraints to accessing the current PKH payment process appear to be the
distance and cost to reach the pay point, and the time they wait to receive their payments.
While some recipients reported taking advantage of waiting at the post office for their payment to also
see their friends and socialize, recipients said they have spent hours waiting for their payments. In
2012, the average waiting time to receive a Giro Pos payment at PT Pos branches was two hours, while
Pos Wesel community payments were less than 90 minutes. PT Pos staff interviewed pointed to the
PKH program as the root of this continued problem, claiming that the program, which currently
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

27 April 2015
Page 23 of 34
manages all communication with recipients, does not always give complete and accurate information
to recipients.
In cases of emergency, recipients expressed their fear to stray from their homes. In cases of flooding,
they have found it nearly impossible to leave their homes or neighborhoods (such as to get money, food
or other necessities). In cases of earthquakes, they prefer to wait for aftershocks to subside before
traveling any distance. As such, they would prefer for government or PSPs to deliver any post-disaster
payments to them, rather than traveling to withdraw money. Costs to the program aside, PT Pos is
currently in the best position to provide convenient, close-to-home payment options in post-disaster
situations.
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

27 April 2015
Page 24 of 34
response. However, whether and how their enthusiasm aligns with WFPs priority of delivering
cash to vulnerable populations in emergencies remains to be seen.
During interviews,
stakeholders demonstrated a clear focus on pushing ahead with e-money payments, even if it
slows the payment process temporarily as the program, agents, PSPs and recipients adapt to a
new, more modern system. Additionally, the stakeholders appear to prioritize financial inclusion
in such a way that demands the G2P payment mechanism includes a store of value account.
Such focus is not directly relevant to WFPs desire to find the most effective way to pay
recipients in emergencies.
4. The Unified Database is a targeting tool to leverage, though it has room for improvement.
With an impressively large and comprehensive list of poor households in Indonesia, the Unified
Database is increasingly used not only to target PKH recipients but all other manner of social
programs targeted to the poor. However, its supposed cases of outdated data underline the need
for the government to update it, and it is unclear whether that will happen soon. With updates and
improvement, which WFP could potentially inform to align them with WFP targeting needs, the
Unified Database can offer a clear opportunity for leveraging a central government list for
targeting in emergency situations, regardless of a G2P partnership.
5. KKS is another potential partner program for WFP to monitor in 2015 and beyond.
An in-depth analysis of the structure and functioning of the newly launched KKS was outside of the
scope of this research. Early information available, however, indicates that the program, w h i c h
w i l l reach 15.5 million poor recipients using cash and electronic payment methods, has the
potential to be a partner program for WFP. At this time, the government has focused on its
modernization through aiming to pay one million recipients through e-money. With such an
ambitious plan, KKS has already encountered challenges such as those experienced by PKH.
Before engaging as partners, WFP would benefit from monitoring the programs progress, the
PSPs commitment (particularly the e-money PSPs) and the recipients experiences to confirm
whether it would serve WFPs needs and be interested in so quickly partnering with WFP on a
new initiative. For more information on KKS, see Annex 2.
7. Feasibility Assessment and Specific Recommendations

Program Feasibility: PKH
Given the current limitations of e-money, PT Pos position as lead G2P payments provider,
stakeholders prioritization of e-money and financial inclusion, the strengths and limitations of the
Unified Database and the other G2P programs managed by the Ministry of Social Affairs, six criteria
emerge for evaluating whether WFP should partner with PKH:
Program has effective relationship with PSPs. Do the program and PSP(s) see a continued
relationship, or is it at risk of ending soon? Are the program and PSP typically able to
coordinate to pay recipients on time? In emergency situations, such as after an earthquake or
flood, would the program and PSP be able to work together to make on-time payments?
Program has the flexibility to make additional payments or add more recipients. Do the
program and PSPs have the capabilities to promptly add payments or recipients (at least
temporarily)?
PSP has access to sufficient infrastructure to make payments that are relatively low-cost to
the program. Are the necessary infrastructure and systems in place for each PSP? How do PSP
transaction fees compare to other fees in low- and middle-income countries?
Recipients trust PSP to pay them the correct amounts on time at a location convenient (or
at least not inconvenient) for recipients. Do recipients have problems receiving their
payments, whether because payments are late or the incorrect amount? How far do recipients
have to travel for their payments? How long do they have to wait to get their payments?
Program serves a significantly large and inclusive group of recipients likely to be affected
by natural disasters or other emergencies. Does the program cover a substantial number of

27 April 2015
Page 25 of 34
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.
PKH and the PSPs have the

flexibility to make additional
payments or add more
recipients.
PSP has access to sufficient

infrastructure to make payments
that are relatively low-cost to
the program.
Recipients trust the PSP to pay

them the correct amounts on
time at a reasonably convenient
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.

27 April 2015
Page 26 of 34
Criteria
location.
Program serves a significantly
large and inclusive group of
recipients, likely to be affected
by natural disasters or other
emergencies.
Program is ready to embrace

emergency response partnership
with WFP.
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).

27 April 2015
Page 27 of 34
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.

27 April 2015
Page 28 of 34
Annex 1: BNPBs Interest in Cash Transfers for Disaster Management

BNPB has some limited experience deploying cash transfers for emergency response. However, BNPB
staff expressed clear interest in understanding how best to most efficiently and systematically conduct
emergency payments. In general, they were enthusiastic about the idea of leveraging G2P schemes
that are already in place, especially as those schemes move toward more electronic payments. Staff
viewed recipients having one card through which to receive payments as convenient for the program
and a better way to track who qualifies for payments. Trying to pay qualified displaced people in
refugee camps, they have experienced problems with the number of people in camps suddenly
multiplying at payment times. Staff also suggested that recipients would be less likely to spend money
on unnecessary goods because they would not have physical cash to easily spend.
BNPB outlined the following areas in which they believe additional technical or operational support
from WFP could help them enhance their capacities on cash transfers or e-payments:
Providing information on best practices in cash and voucher working group implementation,
regulation and payment options.
Supporting BNPBs integration and coordination with other institutions for emergency response.
Advising on how to communicate best with people about cash transfers payments, purposes and
processes in an emergency (such as early warning and evacuation).

27 April 2015
Page 29 of 34
Annex 2: Details of the Family Welfare Deposit Scheme (KKS)

Launched in November 2014, KKS is an unconditional cash transfer scheme that reaches the bottom 25
percent (15.5 million recipients) of the Indonesian population every other month. The program pays
14.5 million through PT Pos and the other one million through Bank Mandiris e-cash account using
Telkomsel SIMs. Recipients receive IDR 400,000 (US$32.04) every two months. They learn about
payment dates from local government officials, which receive letters from the PSPs, or from neighbors
and other KKS recipients. Recipients have no clear program officer to contact in case of questions,
problems or misunderstandings.
Learning from the challenges of PKH e-money registration, TNP2K and PSPs have simplified the SIM
registration process for KKS payments. For KKS, Bank Mandiri benefits from a government waiver that
allows it to register recipients accounts and activate recipients SIMs (via Telkomsel, XL and Indosat) in
bulk. This process requires registration data to be precise with no spelling errors, or the data will not
match the information in the Unified Database. Bank Mandiri claims that KKS offers a much simpler
back end system than PKH. For recipients to register, TNP2K arranged registration points where
recipients exchange their cards related to the previous version of the KKS program for four new cards
to access different family welfare services, including a SIM-embedded card to receive KKS payments.
Unlike PKH SIM cards, KKS SIM cards will remain active for five years regardless of the owners activity
level of calls, SMS and adding airtime.
Upon registration, recipients go to an agent who scans their SIM-embedded card, checks their ID and
disburses their money. Although considered an e-money transaction by the program, the transaction is
not a traditional e-money payment. At PT Pos, recipients complete withdrawal slips, the PT Pos staff
scans recipients SIM-embedded cards and checks their ID to conduct the transaction. Some PT Pos
branch staff prefer the PKH system where program officers typically complete the withdrawal slips for
recipients; KKS does not have similar program officers.
Bank Mandiri drives the e-money payment system but has contracted PT Pos as a payment agent in
certain areas. KKS transmits funds to Bank Mandiri, which transmits the grants to recipients SIMembedded cards. Recipients receive their payments through a designated e-money agent or PT Pos
branch and Bank Mandiri, Telkomsel and PT Pos split the fees paid by KKS. However, PT Pos found that
Mandiris phone number-based account numbers were three digits longer than its Giro Pos account
numbers. When PT Pos branches tried using Bank Mandiris system to complete transactions, they
found signal strength to be too weak, leading to long waiting times for recipients. PT Pos therefore
elected to use its own system to conduct transactions. Bank Mandiris payments are real-time but
completed the following day to balance with PT Pos payments.

27 April 2015
Page 30 of 34
Annex 3: Comparison of Cost per Transaction for G2P Programs in Low

and Middle-income Countries 42
Exhibit 5 show PKHs position in terms of cost per transaction as compared with other G2P programs in
low and middle-income countries. Table 5 provides more details about the programs.
Exhibit 5: Cost per Transaction for G2P Programs in Low and Middle-Income Countries
11.3%
9.1%
3.5%
42
2.4% 2.1% 2.0%

1.6% 1.3% 1.2% 1.2% 1.1%
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.

27 April 2015
Page 31 of 34
Table 5: Details about Transaction Costs for G2P Programs in Low and Middle-Income Countries
Country
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.

27 April 2015
Page 32 of 34
Annex 4: Meeting List

Name
Nancy Widjaja
Pak Pungky and Staff
Pak Sumedi
Tidhar Wald
Pak Agus Noorsanto
Eky Amrullah
Leesa Shrader
Ibu Oetami Dewi and staff
Pak Supoto
Pak Amrizal and Staff
Ibu Vivi Yulaswati
Michael Joyce, Hilman Paloan,
Ari Perdana
Brian Dusza
Daniel Adriens, Sandra
Luvisutto, Mohamad Marji,
Diandra Pratami, Ismawanti
Arif
Blake Audsley
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
WFP Regional Bureau

27 April 2015
Page 33 of 34
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.
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

27 April 2015
Page 34 of 34
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

Assessment of Potential WFP G2P Partner Programs in Indonesia

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Assessment of Potential WFP G2P Partner Programs in Indonesia

Uploaded by

Copyright:

Available Formats

World Food Programme

Evaluating Partnerships with Existing National Safety Nets for

Date: April 27, 2015

World Food Programme

World Food Programme

World Food Programme

World Food Programme

World Food Programme

World Food Programme

World Food Programme

1. The Indonesia Context6

Current US$ (billions, 2012)

World Food Programme

Natural Disaster Management

World Food Programme

Financial Infrastructure for Electronic Transfers

ATM + Debit Card Purchases

Credit Card Transactions

Source: Bank Indonesia, 2014. http://www.bi.go.id

World Food Programme

Evolution of Cash Transfers Schemes

World Bank. 2013. http://data.worldbank.org/indicator. Full reference in References.

World Food Programme

2. Program Keluarga Harapan (PKH) The Family Hope Program

No. of households (millions)

Budget (million US$ PPP)

No. of households (millions)

Exhibit 3: PKH Growth, 2007-2012

Budget (million US$ PPP)

World Food Programme

Table 2: PKH Overview

Every 3 months (4 times per year)

World Food Programme

3. PKH Payments Implementation and PSP Experiences

World Food Programme

Pay Points (Type and

IDR 9,000 (US$0.72)

IDR 5,000 (US$0.40)

PT Pos PKH Payments

World Food Programme

World Food Programme

E-Money PKH Payments

BRI PKH Payments

World Food Programme

World Food Programme

Bank Mandiri PKH Payments

World Food Programme

Finding the Right Agents

Financial Inclusion and E-Money Accounts

4. Program Stakeholder Experiences & Perspectives on E-Payments

World Food Programme

State Ministry of National Development Planning (Bappenas)

World Food Programme

5. Recipients Experiences with E-Money and PT Pos

World Food Programme

World Food Programme

7. Feasibility Assessment and Specific Recommendations

World Food Programme

PKH and the PSPs have the

PSP has access to sufficient

Recipients trust the PSP to pay

World Food Programme

Program is ready to embrace

World Food Programme