Early Experiences of Beneficiary Choice in Government-to-Person Payment Architecture in Indonesia

This work is a product of the staff of The World Bank. The findings, interpretations,and conclusions expressed in this work do not necessarily reflect the views of theExecutive Directors of The World Bank or the governments they represent. TheWorld Bank does not guarantee the accuracy of the data included in this work. Theboundaries, colors, denominations, and other information shown on any map in thiswork do not imply any judgment on the part of The World Bank concerning the legalstatus of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions © 2023 The World Bank1818 H Street NW, Washington DC 20433Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved Photo Credit Shutterstock, unsplash, flickr less otherwise noted Acknowledgments This report is a deliverable under the COVID-19 SocialAssistance Responses and G2P Payment study (2021–22),a collaboration between the World Bank and thegovernmental National Team for Acceleration of PovertyReduction (Tim Nasional Percepatan Penanggulangan Kemiskinan;TNP2K).The study was funded jointly by the Indonesia Human CapitalAcceleration Multi-Donor Trust Fund (IHCA-MDTF) and the G2Px InitiativeFund. The study was conducted successfully due to strong support fromgovernment institutions, especially the project management office ofKartu Prakerja led by Denni Puspa Purbasari, Romora Sitorus, and team. Early Experiences of Beneficiary Choice in G2P Payment Architecture in IndonesiaThe report was drafted by two teams of the World Bank Jakarta—Finance, Competitiveness and Innovation, and Social Protectionsand Jobs—led by I Gede Putra Arsana and Ekki Syamsulhakim withsignificantcontributions from World Bank expert consultants,includingEflina Pehulita Sinulingga,Martha Safitri,NurzantyKhadijah, Muhammad Noor Farid, Rachmat Reksa Samudra, BenSatriatna, Mia Amalia, and Rissalwan Habdy Lubis.Moreover, thereport has benefited greatly from reviews, feedback, and input fromadditional World Bank colleagues—Achim Daniel Schmillen, Marco Nicoli,Sara Giannozzi, Georgina Marin, Maria Camila Ayala Guerrero, ChangqingSun, and Karol Karpinski. Finally, Katherine Demopoulos managed theeditorial process. Great appreciation is extended to various external parties involvedin the study.The phone survey was conducted by a SurveyMETER teamled by Bondan Sikoki, Wayan Suriastini, and Nasirudin Rais. The studyreceived valuable guidance and information from the program owners/managers of social assistance programs in Indonesia. These partiesinclude the Ministry of Social Affairs and the project management officeof Kartu Prakerja. Insights were also gathered during qualitative datacollection from payment services providers including PT Pos Indonesia,Bank Negara Indonesia (BNI), Bank Rakyat Indonesia (BRI), Bank TabunganNegara (BTN), Bank Mandiri, GoPay, OVO, LinkAja, and DANA. 1.1.BackgroundPAGE 121.2.MethodologyPAGE 13 2.1.Program Keluarga HarapanPAGE 212.2.Program SembakoPAGE 272.3.Kartu PrakerjaPAGE 312.4.Comparing Beneficiary CharacteristicsPAGE 36 Chapter 4G2PPaymentAnalysis 903.1.G2P Digitization in Response to COVID-19PAGE 443.2.G2P Payment Reform in IndonesiaPAGE 463.3.Advancing Indonesia’s G2P SystemPAGE 493.4.Focus on Beneficiary ChoicePAGE 51 4.1.Satisfaction with Payment MethodPAGE 594.2.Cashing OutPAGE 634.3.Use of AccountPAGE 724.4.Cash versus Digital Financial ServicesPAGE 814.4.Women’s Economic EmpowermentPAGE 84 Chapter 5Conclusionand PolicyRecommendations Annex 1Result of Beneficiary Choice AnalysisPAGE 95 Early Experiences of Beneficiary Choice in G2P Payment Architecture in IndonesiaSelected Districts and Cities for Survey....................................................................................................................................17Delivery Phases for Kartu Prakerja............................................................................................................................................32Kartu Prakerja Beneficiary Journey..........................................................................................................................................34Distribution of Age Group (%).....................................................................................................................................................37Distribution of Gender (%)...........................................................................................................................................................37Distribution of Educational Attainment (%).............................................................................................................................37Position of Respondent in Household (%)..............................................................................................................................38Marital Status of Respondent (%)......................................................................................................