Government Launches Family Welfare Deposit, KIP​​ and KIS Programmes in Stages

04 November 2014

To improve the welfare among Indonesian people, the government today launched the Family Welfare Deposit Programme, Smart Indonesia Programme and the Healthy Indonesia Programme in five post offices in Jakarta, including post offices in Pasar Baru, Kebon Bawang, Jalan Pemuda, Mampang and Fatmawati.

Gradually, the government will distribute to 15.5 million poor families in Indonesia the Family Welfare Card (KKS), which replaces the Social Assistance Card (KPS); SIM cards containing electronic money for Family Welfare Deposit Programme; Smart Indonesia Cards (KIP) for KIP beneficiaries; and Healthy Indonesia Cards (KIS) for KIS beneficiaries.

Bambang Widianto, Executive Secretary at the National Team for the Acceleration of Poverty Reduction (TNP2K), explained that in the early stages, the government would distribute the KKS, SIM, KIP and KIS cards to 1 million poor families. “These programme mark a new era in improving the welfare of the poor through productive activities in the form of a deposit account, the continuation of children’s education and the wider provision of health insurance," he said.

Family Welfare Deposit is financial assistance given poor families via a deposit account, as part of the national strategy for financial inclusion. The provision of assistance is intended to promote access to financial systems among society as a whole, in order to improve welfare levels through the equitable distribution of funds and to maintain the stability of the financial system. The provision of deposits is an improvement to the cash transfers mechanism using for in Unconditional Cash Transfers, which formed part of the compensation package for fuel price increases in 2013.

The government recognises that formal banking services are still not able to reach all levels of society, especially in rural and inland areas. Therefore, the government encourages the use of savings through Digital Financial Services (LKD), in the form of electronic money. "Through LKD, people are no longer limited by the presence of banks or ATMs. They can send money through mobile phones and withdraw cash via an agent appointed by the bank that hold their funds," Widianto said.

Through LKD, deposits and non-cash transactions use mobile phone number as funds for deposit accounts. Trials using LKD to distribute social assistance to 1,600 beneficiary households of the Family Hope Program (PKH) in four provinces yielded good results. "Through LKD, the government also provides security and comfort to beneficiaries. By using the SIM card, a person does not need to queue to receive their cash assistance as it has already been channelled through an account linked to their cell phone number. In addition, as recipients do not need to withdraw cash immediately, it is also safer for them,” Widianto added.

In addition, the government aims to help the children of poor families stay in education through the provision of cash assistance as part of the Smart Indonesia programme. Smart Indonesia Cards are to be distributed to all school-age children, from seven to 18 years’ old, from poor families, both registered and unregistered in schools and madrasahs. “At this early stage, the government is distributing Smart Indonesia Cards to 157,943 school-aged children from one million poor families," Widianto said.

Lastly, the government will also distribute Healthy Indonesia Cards to 4,451,508 individuals, or the members of the one million poor families. KIS acts as a health insurance card, and can be used to access free health care at first-level and more advanced healthcare facilities, in accordance with the needs (illness) of the KIS recipient. KIS is an expansion of the National Health Insurance programme, which was launched by the previous government on 1 January 2014. Through KIS, the Healthy Indonesia programme provides additional benefits as well as prevention, promotion and early detection services that are more intensive and integrated.

The initial phase of the launch will be conducted in 19 districts/cities in nine provinces: Jembrana, Pandeglang, North Jakarta, East Jakarta, Central Jakarta, South Jakarta, West Jakarta, Cirebon, Bekasi, Kuningan, Semarang, Tegal, Banyuwangi, Surabaya, Balikpapan, Kupang, North Mamuju, Pematang Siantar and Karo. Launch events are expected to be completed in mid-December 2014.