Resistance to e-Money in Poor Remittances Receivers Families, Case in Lombok Island, Indonesia IMTFI Conference 2012 University of California, Irvine CEPPS-UGM Catur Sugiyanto, Tiar Mutiara Shantiuli, Zuhrohtun 1

Arab Saudi Malaysia 2 Its HDI is ranked 32 out of 33 provinces

3 Remittances….. Cash? Saving Account? Mobile Money/ E-money?

200 Respondents 4

6

7 Most of the Remittances from…..

8 Mode of Transfer

9 The “cashing” transfer process: Show your PIN (SMS) Show your ID Fill out a “form” But Need “tekong” to help

10 The form is too much for the remittances receivers

11 Can not fill out the form……. 3 WOMEN ARE HELPED AT A TIME NO Secret….

12 Help from “tekong” … the private (unlicensed) worker agency

13 Friends bring the money and give to parents/beneficiaries at the local airport

14 Ready for E-money?

15 Ram and Sheth (1989) resistance to innovation- technology

16 Mobile money is not easy to use, not convenient, and not easy to understand Only for high level class, large amount of money, and well educated people New technology and the service are difficult to understand, and mobile network is hard to access A need of a traditional face to face banking service

THANK YOU TERIMAKASIH 17

Factors resistant to use Mobile Banking 1. Usage Barriers (11.75%) Mobile banking is not easy to use, not convenient, and not easy to understand 2. Social Barrier (9.75%) Only for high level class, large amount of money, and well educated people 3. Image Barrier (9.33%) New technology and the service are difficult to understand, and mobile network is hard to access 18

4. Risk Barrier (8.8%) A fear of mistaken inputing information, card duplication, lost a PIN code which end up at the wrong hands 5. Tradition Barrier (8.7%) A need of a traditional face to face banking service 6. Advantage Barrier (5.49%) Unable to take benefits of mobile banking use 7. Accessibility Barrier (4.9%) Limited network access 19

Good afternoon, my name is Catur Sugiyanto Iam from Gadjah Mada university in Indonesia. The work that I will present is a collaborative work with Tiar Mutiara and Zuhrohtun. We also agree that I present the results and they will take the questions. First of all we would like to thank to Prof Bill Maurier and Jenny and all the IMTFI teams for bringing us to the field study (about 2 hrs flying from our home town and another 20 hours to come here). We have a great time here in Irvine 20

The title of our study is “resistence to use e- money among the poor remittances receivers in Lombok Island, in Indonesia” The situation is that, we have been sending young and productive workers abroad. They creates opportunity for a better life to their family and relative who were left behind, through remittances. Most of them in big group coordinated by a private agent, like this men giving a brief instruction before they checking in. 21

Most of the migrants worker go to Malaysia, Arab Saudi and recently Taiwan, Hongkong, South Korea are favorite countries to work. So if we are in Irvine right now, we can across the pasific ocean and find Indonesia. Here is the Java island, Bali, and Lombok island The question that we are trying to answer is that whether there has been changing in the way the workers family manages their remittances, from cash basis, to mobile money or e-money. Would the demand for these modern ways of managing money develop? 22

If not yet, what factors hinder their development? We visited 200 household in Central and Eastern part of Lombok island. we visit only those which has at least one family member as a migrant worker. We ask questions related to how the remittances sent from the worker to the family in Lombok and how they manage the money. Here are the preliminary results 23

We use their building/house to identify whether the familly’s level of living is high or low Most of the person we met are women between 20 to 40 years old. We ask to those who make decision on how to use the remittances They have elementary education (6 years education) and working status is as farmer. The money they received mostly from Malaysia 24

The remittances were wired though Banks (bank BNI is the dominant) and Western Union (Pos office, pawn shop) and other transfer services institution. And now we have…The “traditional” people embrace with the “modern” institution start from here. 25

Basically “cashing the remittances” is easy. We have to show the PIN from the sms, and the ID. But there is a form that has to be fill out, and most of the remittances receivers have problem with this form. Therefore they ask for help from any person including the tekong (the private person whose job is helpers), the worker agency, and also the remittances were brought in cash when there are friends returning their home for a visit/holiday. 26

We observe that the airport becomes crowded when there are migrant workers visit. 27

With that kind of potret of the remittance receivers, then we try to identify their familiarities with the modern institution and technology….before using the mobile banking/e-money we ask the types of modern technology related to e-money the people use. Do they have – Saving account – ATM card – Mobile phone – Mobile Money/e-money 28

Then… do they ready for the mobile money or E- money Here we try to describe what we mean by the mobile money or e-money, and ask if they are interested to use it Following Ram and Seth, we asked question what things that bother them in using the mobile money/e-money We use factor analysis to group many dimensions that make the people not using them. Here is what we have. 29

The reason for not using the mobile money/e- money are the usage barrier,……. The numbers in percent are the contribution of each factor in explaining the reason. 30

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