Program Keluarga Harapan Payments through Alternative Channels: Strategy and Key Requirements

Working Paper 22

December 2014

Authors: Michael Joyce, Brian Le Sar, Johann Bezuidenhoudt, Brendan Ahern and David Porteous

Program Keluarga Harapan (PKH) is a Conditional Cash Transfer programme that delivers benefits to 2.3 million families in Indonesia. Payments to these families are currently made through a manual process involving the Indonesian Post Office. This paper discusses the opportunities and considerations in evaluating alternative payment mechanisms and recommends a strategy for moving to payment methods that are more efficient for the programme, easier to access for beneficiaries and provide the potential for financial inclusion through savings accounts or other financial instruments such as pre-paid cards or mobile money.

This strategy would involve an evolutionary process that must address not only payment technology issues, but also a shift from a “managed” disbursement process, whereby beneficiaries rely heavily on facilitators in order to access their benefit funds, to a “self-service” process, in which beneficiaries are able to select the most appropriate time, place and method to access their funds. The paper also proposes key principles and a requirements matrix to be considered when selecting payment mechanisms.

The TNP2K Working Paper Series disseminates the findings of work in progress to encourage discussion and exchange of ideas on poverty, social protection and development issues.

Support for this publication has been provided by the Australian Government through the Poverty Reduction Support Facility (PRSF).

The findings, interpretations and conclusions herein are those of the author(s) and do not necessarily reflect the views of the Government of Indonesia or the Government of Australia.
You are free to copy, distribute and transmit this work, for non-commercial purposes.

Suggested citation: Joyce, M., B. Le Sar, J. Bezuidenhoudt, B. Ahern and D. Porteous. 2014. ‘Program Keluarga Harapan Payments through Alternative Channels: Strategy and Key Requirements’. TNP2K Working Paper 22-2014. Jakarta, Indonesia: Tim Nasional Percepatan Penanggulangan Kemiskinan (TNP2K).