World Bank provides Indonesia with USD 250 mln

Thursday 5 January 2023 11:24 CET | News

World Bank Group’s International Bank for Reconstruction and Development (IBRD) has provided Indonesia USD 250 million to help strengthen the country’s civil registration.

The investment is aimed at increasing the use of biometric digital identification for accessing public and private sector services.

After the Philippines, Brazil, Thailand, and Colombia, Indonesia is the country with the fifth-highest internet usage worldwide. Between 2015 and 2021, the proportion of homes with internet access doubled, from 42% to 82%. The difference in access between rural and urban areas has decreased by half, from 30% to 15%, and the typical internet user in Indonesia logs on for more than eight hours each day, ranking tenth in the world.

Even though Indonesia has already checked off many boxes, it has not yet provided the online, financial, and digital sectors with the advantages of digitised identities. In Indonesia, e-KTP (or an earlier version of KTP) is used 97% of the time, and 88.4% of people aged 17 and younger have birth certificates.

The potential user base for a digital ID for online transactions is highlighted by these high rates of use. Through growing online transactions with the public and commercial sectors, the trend of rising internet penetration and declining internet inequality presents a crucial enabling environment for lowering disparities in access to services and economic opportunities.

Indonesia’s digital identity system

Indonesia's Personal Data Protection Law (PDP, modelled on GDPR), was enacted in October 2022. However, the country does not yet have a formal digital ID system or framework, which hinders digital trust and the transition to an effective digital government, vibrant digital economy, and digital society.

World Bank provides Indonesia USD 250 million to help strengthen the country’s civil registration.

By expanding birth registrations and developing a new automated biometric identification system, this project aims to digitise identity in order to combat geographic inequalities, a gender gap in financial inclusion, and to strengthen the digital economy (ABIS).

Either way, the research makes clear that having ID does not guarantee easy access to services. The changes would give authorities the ability to make it easier for institutional users to complete digital onboarding, including (but not limited to) via biometrics, to enable more affordable access to services, whether in person or remotely.

This is just one of the many digital identity projects that the World Bank is sponsoring and supporting globally. Other projects include those in the Philippines, Nigeria, and the Philippines.

The digital identity project

‘ID for Inclusive Service Delivery and Digital Transformation in Indonesia’ outlines the five components of an improved digital identity ecosystem for Indonesia. In order to bring people into the system and then digitise them, component one focuses on enhancing population and civil registration, especially in underdeveloped provinces and for vulnerable groups.

The project aims to expand the issuing of legal identification documents such national ID numbers (NIK), electronic national ID cards (e-KTP), and birth certificates as well as reform processes to make them more durable and effective.

The Proposed Development Objectives measure the rates of NIK issuance in 11 priority provinces, the percentage of children under the age of four who have received birth certificates, the installation and authentication of digital ID apps, the use of eKYC at the individual and institutional levels, and the gender distribution of bank account holders.

As of September 2022, institutional users who have collaboration agreements with Ditjen Dukcapil had completed more than 7 billion real-time verification queries, indicating that this project is already progressing.

More: Link

Free Headlines in your E-mail

Every day we send out a free e-mail with the most important headlines of the last 24 hours.

Subscribe now

Keywords: investment, digital identity, banks, biometrics, transactions
Categories: Fraud & Financial Crime
Companies: World Bank
Countries: Indonesia
This article is part of category

Fraud & Financial Crime

World Bank

Discover all the Company news on World Bank and other articles related to World Bank in The Paypers News, Reports, and insights on the payments and fintech industry:

Industry Events