smart card for micro-finance application crucial lifeline for...
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2009/TEL39/LSG/IR/004
Smart Card for Micro-Finance Application Crucial Lifeline for the Emerging MMSE
Submitted by: Alita
Industry Round Table - How SMEs Can Leverage on ICT for Growth and Innovation
Singapore 14 April 2009
by Ita YuliatiAlita Group, CEOIndonesia
The 39th APEC Telecommunications and Information Working GroupSingapore, 13-18 April 2009
Smart Card for Micro-finance Application :Crucial Lifeline for the Emerging Micro, Medium and Small Enterprise
I N D O N E S I A
I n f o c o m m N e t w o r k S o l u t i o n
w w w . a l i t a - i n d o n e s i a . c o m
i n f o @ a l i t a - i n d o n e s i a . c o m
ISTS
Indonesian Secure Transaction System
ISTS’s Biometric Smartcard Potential
Enable under-banked & unbanked people to access micro finance towards less-cash societyEnsure that only the real cardholder can access to the micro loan Prevent fraudulent micro loan application including redundant, blacklisted & unauthorized loan disbursementCan be implemented within a couple of months to provide a quick time to marketCan provide solution for ID application, Cooperatives, Community Credit Banks, Distributed & subsidized goods, Healthcare & Insurance, Prepaid application (energy, transportation, micro payment) etc.Empower micro, small & medium enterprises with secure & latest chipcard technologies without their own investment.
Practical Applications
Suitable for semi-rural & rural communities with insufficient infocomm infrastructure, to enable community credit banks & cooperatives enjoy the ultimate secure electronic micro finance transaction without own investment. Both offline & online transaction is supported.For Cooperatives: Provide convenient, fast, privacy & eliminate manual back-office loan processingFor Healthcare & Insurance companies: Compliment their IT solution with convenient, fast & privacy for the cardholderCard Management: Can provide convenient, fast, privacy chip card solution without changes in the core banking application. For micro banking, the core banking application can be implemented later to provide the bank the speedy time to market & low total cost of ownershipSolution is also available for Logistics & Suppy-chain management, including subsidized goods distribution
BankingActivity (Transfer,
Withdrawal, Remittance, etc)
MicroLending &
Loan
Wages, Salary,Welfare & Social Security
Distribution
Utility Bills, Loyalty, etc
Health &Insurance
ID Card
Payment /E-Cash
ISTS System Host
ISTS System Host
CardIssuers
Acquirer
BanksGovernmentOil CompanyUtility CompanyCooperativesInsurance Companyetc.
MerchantHotelGas StationsRestaurantBanksCellular OperatorPost Officeetc.
TMTM
How We Implement ?
In a cooperative: existing cooperative which has each members belongs to one and only one member group, can enjoy ISTS’s biometric smartcard to prevent unauthorized member & group head to access the collection money & only legitimate cardholder can access the micro loan.Several member groups will share the PC based POS devices, and will lower the total cost of ownership. The mentor of the member groups will be the authorized person to be assigned the POS devices.
If infocom infrastructure is insufficient or unavailable, ISTS’s biometric smartcard solution can be utilized in offline mode. During posting processing, the batch of the offline transactions will be posted to the central site. A shadow account at the central server will be representing the actual information available on the chip card. the shadow account & its related records will provide necessary information for card replacement, & missing information can be prevented by having the transaction logfile.
Offline POS
Vision : Linking up Larger National Network
Collective CooperativeCollective CooperativeOrganizations in East Organizations in East
Java :Java :
PUSKOWANJATI,PUSKOWANJATI,members : 60.000members : 60.000
Centralized Centralized Indonesian WomenIndonesian Women
Cooperative Cooperative OrganizationsOrganizations
LinkageLinkage
LinkageLinkageLinkageLinkage
LinkageLinkageKoperasi Koperasi YY
Koperasi Koperasi XX
Koperasi Koperasi YY
Empowering MSME Through ICT
•Facts :
In Indonesia, total number of micro, small and medium sized enterprise (MSME) in operation reaching about 43 million business unit
Small and medium sized enterprises (SME) contribute more than 53% to Indonesian GDP in 2006 - 2007.
SME make up 95% of all enterprises in the Asia Pacific and contribute 30 to 60% in Asian Economy.
Linking Up to APEC Network ?
Thank You ! Terima Kasih !
Business Case :Implementation of Smartcard-based cooperative system for "Setia Budi Wanita” A-Cooperative Organization in Malang
Koperasi: a private, semi, and/or govermental organizations formed in an entity involved in a diverse range of economic activities by providing value to its members, staff and the community based on its values of self-help through co-operation, mutual aid among members, thrift, equality and equity.
A Women Cooperative Organization :“Setia Budi Wanita” (SBW) Operated in Malang
Field of itsSmall Business
Units
SBW CooperativeMalang
SBW CooperativeMalang
Loan & Savings
Dairy ProductsIndustry
Agriculture &Plantation
Trading
Health Care
Printing
Awarded as 2nd BestCooperative Organization
in 1979
Currently Have5.000 Member
ISTS’s Main Serverat SBW
ISTS’s Main Serverat SBW
ISTS Smartcard Implementation
Registration Card Personalization
WholeSBW Members
Card Ready to Use1 2
Group PICGroup PIC
3
Card Usedfor Loan &Deposit in
GroupCard Used
for Shoppingw/ Offline/
Online Cashier
5
Submissionof activitydata by PIC
4
6 Reconciliation
Cashier
6
Reconciliation
ISTS’s Core SystemCentral Server
for EAST JAVA Regionat PUSKOWANJATI
ISTS’s Core SystemCentral Server
for EAST JAVA Regionat PUSKOWANJATI
Consolidation
Consolidation
Other WomanCooperatives
UnderPUSKOWANJATI
7
About Un-banked and SME
In Indonesia and Asia
Proportion of Banked & Un-banked People
http://www.guerrantfoundation.org/sitebuilder/images/pyramid-615x463.jpg
ProbablyUnbanked
ProbablyUnderbanked
Banked
SME In Indonesia
Source : SME Statistics 2006-2007, Indonesian Republic Ministry of Cooperatives and SME, downloaded from : http://www.depkop.go.id/index.php/Statistik-UKM/
Financial, Rental, and Services
Company, 1.87%
Graph 1 : SME Economic Proportion based on number of business unit in 2007
Services , 4,60%
Communication and Forwarder , 5,54%
Trading, Hotel and
Restaurant , 28.12 %
Buildings , 0,35 %Electricity, Gas
andFresh Water ,
0,02 %
Food Industry, 6,49 %
Mining and digging, 0,53 %
Agriculture, Life-stocks, Forestry, and Fisheries 52,48 %
SME Contribution to Indonesia Economy
Source : SME Statistics 2006-2007, Indonesian Republic Ministry of Cooperatives and SME, downloaded from : http://www.depkop.go.id/index.php/Statistik-UKM/
Graph 2 : SME Contribution Proportion and Large Enterprises to National GDP year
2006-2007
SE ME LE
Year
Percentage
SME in APEC Countries
Member of Economy (Year Joined)
Population(Million)
GDP(US$bn)
GDP per Capita(US$)
SME’sNumber in %
SME’sEmployment (%)
Australia (1989) 19,5 622,7 30,69596,8 (1997) Small Biz
Only50,2 (1997) Small Biz
OnlyBrunei Darussalam (1989) 0,36 5,2 14,352 98,0 (1997) 92,0 (1997)
Canada (1989) 31,3 970,3 30,439 98,0 (1996) 94,0 (1996)
Chile (1994) 15,6 89,3 5,571 15,7 (1993) 36,5 (1993)
China (1991) 1,294 1,601 1,227 99,0 (1993) 78,8 (1993)
Hongkong, China (1991) 7 164 23,592 98,2 (1995) 60,7 (1995)
Indonesia (1989) 217,5 222 1,003 98,0 (1996) 88,3 (1996)
Japan (1989) 127,5 4,621 36,184 98,8 (1996) 77,6 (1996)
Korea (1989) 47,7 667,4 13,806 99,0 (1993) 69,0 (1993)
Malaysia (1989) 23 112,5 4,418 84,0 (1997) 12,3 (1997)
Mexico (1993) 101,8 663,1 6,377 98,7 (1994) 77,7 (1994)
New Zealand (1989) 3,8 92,9 23,120 98,9 (1997) 52,3 (1997)
Papua New Guinea (1993) 5,7 4,0 686 N.A. 52,9 (1997)
Peru (1998) 26,5 66,2 2,290 N.A. N.A
Philippines (1989) 78,6 84,2 1,019 99,5 (1988) 66,2 (1996)
Russia (1998) 143,8 517,8 4,016 85,6 (1993) 33,5 (1993)
Singapore (1989) 4,2 103,6 23,999 91,5 (1995) 51,8 (1995)
Chinese Taipei (1991) 22,5 307,5 13,359 97,8 (1997) 78,4 (1997)
Thailand (1989) 64,3 165,7 2,556 95,8 (1997) 18,1 (1996)
United States (1989) 288,5 11,750 39,991 90,0 (1993) 69,0 (1993)
Vietnam (1998) 80,2 40,4 494 N.A. 85,0 (1998)
Source : Tarmidi, Lepi T, The Importance of MSE’s in Economic Development of Developing APEC Countries, paper from : http://www.apec.org.au/docs/koreapapers2/SVII-LT-Paper.pdf, December 2004 Data
Contribution of SME in APEC Country
Source : Tarmidi, Lepi T, The Importance of MSE’s in Economic Development of Developing APEC Countries, paper from : http://www.apec.org.au/docs/koreapapers2/SVII-LT-Paper.pdf, December 2004 Data
Jobs Firms
All SMEs 68% 99%
Micro(Up to 5 Employees)
30% 75%
Small(5-19 Employees) 20% 20%
Medium(20-100 Employees) 18% 4%
Thank You ! Terima Kasih !