Public-Private Partnerships and Financial Inclusion

Transcription

1 Section 8: Public-Private Partnerships and Financial Inclusion Workshop on Enhancing Access to Formal Financial Services in Indonesia Eugene Keith Galbraith President Commissioner PT Bank Central Asia Tbk

2 Major Initiatives in Promoting Financial Inclusion Increase reach of financial system to the excluded population Payment system and capital access (micro finance) Make the excluded population visible to financial system Identify low-income segment Simplify the procedures for excluded population to access financial system Simplify the standard for opening accounts below certain amount Simplify micro credit procedures without diluting prudent lending focus Improve education to the excluded population Promote financial literacy and credit counseling Education is a key success factor in financial exclusion initiatives Promote the importance of financial inclusion to benefit society Slide 2

3 Government Provides Framework. Private Sector Takes the Lead Government or donor sponsored subsidized or directed lending programs have now proven to limit growth and encourage dependency since they induce price distortions that defer effective competition Private sector should take lead if results are to be sustainable. Government should provide supportive regulatory environment BIS Review #35 (2008) Slide 3

4 Allow Market to Drive the Program Price restrictions, whether in the form of interest rate caps or limits on fees, often impede the scaling of financial inclusion. Regulators should allow players to cover their costs of funding and operations. The costs associated with lending to the very poor can be high this cost, combined with characteristically small loan sizes, largely explains the high rates required for microcredit to be economically sustainable. A 2004 study by a leading microfinance consortium looked at the penetration of microcredit in 23 countries with interest rate ceilings and seven countries without these restrictions. The study found that financial penetration rates were four to five times higher in countries without caps. In Indonesia, BRI reported that growth of its microcredit program was severely constrained until the government lifted interest rate caps in the early 1980s. Slide 4

5 Branch and ATM penetration (2001) Geographic branch (ATM) penetration: number of branches (ATMs) per 1,000 square kilometers Geographic branch penetration Geographic ATM penetration , China Malaysia Thailand Indonesia Philippines India Korea Singapore India China Indonesia Malaysia Philippines Thailand Korea Singapore Demographic branch (ATM) penetration: number of branches (ATMs) per 100,000 people Demographic branch penetration Demographic ATM penetration China India Thailand Philippines Indonesia Singapore Malaysia Korea Source: BIS India China Indonesia Philippines Malaysia Thailand Singapore Korea Slide 5

6 Indonesian GDP per Capita Indonesian GDP per capita (in USD) 791 CAGR = 16.3% 944 1,116 1,167 1,321 1,663 1,947 2,271 Growth rate assumption for : 6% p.a 2,362 2,504 2,654 Growth rate assumption for 2009: 4% 2,813 2,982 3,161 3, Source: Central Bureau of Statistics (BPS) Slide 6

7 Deposit Accounts in Indonesia Number of deposit accounts Deposit value < Rp 100 million 97.7% < Rp 100 million 18.8% Rp 100 million - Rp 1 billion 26.9% Rp 100 million - Rp 1 billion 2.1% > Rp 1 billion 0.2% > Rp 1 billion 54.3% 86 million accounts Total value Rp 1,877 trillion number of accounts value (Rp trillion) average value /account (Rp million) < Rp million 84,044, Rp 100 million - Rp 1 billion 1,768, Rp 1 billion - Rp 2 billion 112, ,390.4 Rp 2 billion - Rp 5 billion 55, ,137.5 > Rp 5 billion 30, ,439.9 Total 86,011,873 1, As of October 2009 Source: Indonesian Deposit Insurance Corporation (LPS) Slide 7

8 BCA: Delivery Channels Extensive network and electronic delivery channels to provide convenience to over 8 million account holders nationwide Electronic banking continues to grow and is becoming the transaction channel of choice Branches are the entry point for customer relationship banking Number of ATMs (unit) 5,997 5,654 5,042 4,173 3,218 6,275 Dec-04. Dec-05. Dec-06. Dec-07. Dec-08. Sep-09. Number of Branches (unit) Number of EDCs (unit) 81, , ,885 41,233 53,807 65,645 Dec-04. Dec-05. Dec-06. Dec-07. Dec-08. Sep-09. Dec-04. Dec-05. Dec-06. Dec-07. Dec-08. Sep-09. Slide 8

9 BCA: Branch Transactions Number of Transaction (million) Transaction Value (Rp trillion) 6.813, , , , ,8 130,9 129,1 119,2 118,3 122,6 Slide 9

10 BCA: Daily Branch Transactions Number of transactions per branch per day Transaction value per branch per day (Rp million) 46, , ,559 28,527 30,561 Slide 10

11 BCA: ATM Transactions Number of Transaction (million) Transaction Value (Rp trillion) Slide 11

12 BCA: Daily ATM Transactions Number of transactions per ATM per day Transaction value per ATM per day (Rp million) Slide 12

13 BCA: Internet Banking Transactions Number of Transaction (million) Transaction Value (Rp trillion) Slide 13

14 BCA: Mobile Banking Transactions Number of Transaction (million) Transaction Value (Rp trillion) Slide 14

15 BCA: Average Value/Transaction by Channel Branch Banking in Rupiah 52,048,892 51,047,250 ATM in Rupiah 1,027,190 1,006,352 33,289,127 36,355,028 42,725, , , ,187 4,260,377 Internet Banking in Rupiah 7,542,797 7,048,253 5,916,442 6,018, , ,895 Mobile Banking in Rupiah 1,043,988 1,130,856 1,100,233 Slide 15

16 Thank You Slide 16

17 Biography Eugene Keith Galbraith President Commissioner Eugene Keith Galbraith has been the President Commissioner of BCA since May 20, Prior to joining BCA, he served as Vice President Commissioner of PT Bank NISP Tbk from 2000 to 2006, Chairman of Asiawise.com from 1999 to 2001, Managing Director of ABN AMRO Asia Securities from 1996 to 1998, and President Director of HG Asia Indonesia from 1990 until He has also served as an advisor to the Indonesian Ministry of Finance from 1988 to 1990, and as an economic planning advisor in East Nusa Tenggara Province, Indonesia, from 1984 to He graduated in Philosophy in 1974, holds an M. Phil in Economic History (1978), and a PhD in Anthropology (1983) from Johns Hopkins University, USA. Slide 17