Article

Research on G2P Payments in Papua, Indonesia

    Author:
  • TNP2K
  • April 27, 2015

Figure 1: Collecting education stipends; one of several infographics documenting collection experiences and costs incurred by payment recipients who participated in this research. 

Many Papuans are eligible for social assistance in the form of government-to-person (G2P) payments because the poverty levels in Papua and Papua Barat are among the highest in the country. However, disbursing these payments is difficult, costly and time-consuming. Recent developments in technology and regulatory environments in Indonesia mean that G2P payments could potentially be delivered using locally-based agents and low-cost payment instruments such as electronic money or branchless banking.

A new TNP2K Working Paper provides a snapshot of current payment practices in 18 subdistricts in Papua and Papua Barat that have varying degrees of accessibility. Research highlighted in the paper reveals that beneficiaries are interested in and willing to try alternative payment mechanisms. The research focuses on payments made from the Conditional Cash Transfer Programme for Poor Families (PKH) and the Cash Transfers for Poor Students programme (BSM) but also looked at other payment streams, including salaries for the civil servants and teachers living in the subdistricts studied.

Research shows that the costs of travelling to reach current payment points and the time this takes are major challenges for beneficiaries of these programmes and this situation could be alleviated if alternative payments channels were possible. The research presents a cost–benefit model that suggests potential pricing models for different payment locations. However, before these alternative payment channels can be introduced, Papua and Papua Barat need to have reliable power, transport and communications infrastructures throughout the subdistricts and this remains a major obstacle. Until this issue can be tackled, some areas will need to continue using existing payment methods for the foreseeable future.

View the report here >>

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