131115_International Finance Corporation Workshop on Retailers Behavior_Cash flow management, Credit & Banking
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131115_International Finance Corporation Workshop on Retailers Behavior_Cash flow management, Credit & Banking
- 1. Spirethoughts: Retailers behavior Cash flow management, credit & banking Prepared for: International Finance Corporation Retail Banking Date: 15 November 2013 1
- 2. Today’s Agenda Banking Habits Cash flow management practices Credit to run business 2
- 3. Banking Habits The majority of retail store owners that have accounts in Banks have their account at BRI Proportion of Bank accounts TIME OF BANKING RELATIONSHIP BRI BCA 6 months – 1 year Mandiri 1 – 2 years 3% 10% 18% 17% BNI 17% 8% 17% 25% 33% CIMB Niaga 17% 2% 60% 16% 33% Bank Danamon 53% 1% 40% 33% 2 – 3 years 40% 3 – 4 years > 4 years 62% 3
- 4. Banking Habits Most commonly used bank services Bank Branch (91%) ATM (69%)40% goes once a ATM (69%) month 67% uses to pay utility bills 80% uses to deposit money 52% uses to withdrawal money 29% goes once a SMS Banking (2%) week SMS Banking (2%) 50% uses to pay utility bills Source: Spire’s Internal Data and Analysis conducted in November 2013 67% uses once a week Internet Banking(1%) Banking – 3 Internet50% uses 2(1%) times a week 4
- 5. Cash Flow Management Personal saving is the most common source of retail store, 92% keep the money generated in selling with themselves hidden Personal Money Given by husband and family Loan from bank (KUR Products) Loan from cooperatives Source: Spire’s Internal Data and Analysis conducted in November 2013 5
- 6. Cash Flow Management Almost 100% of respondents make payments to suppliers with cash Retail Stores Customers Suppliers of stock items 6
- 7. Credit to run business Only 8% of respondents use credit for their business, and they mostly borrow loans from the bank Payment preferences Source of loan Invest in business operational Invest in product stock Channel55% to pay used the loan Interest rate and payment 45% period Transfer ATM (80%) 82% 47% Average interest rate 3% 72% 22% 77% Deposit to bank (10%) 18% 6% Cash (50%) Micro Small 9% 3% 11% Total 18% 9% 3% 12 months 24% 18% 9% 24 months Micro 18% 6% 22% 7% 21% 33% Small 36 months 22% Through 3rd party (10%) Family member Personal contact or friend Money lender Cooperative Bank 36% 27% Pawnshop 60 months 21% 4% 4% Total 11% 7
- 8. PT Spire Indonesia Wisma 46 Kota BNI, 25th Floor Unit 07 – 09, Jalan Jendral Sudirman Kav. 1 Jakarta 10220, Indonesia Tel: (62 21) 5794 5800 Fax: (62 21) 5794 5808 id.info@spireresearch.com www.spireresearch.com 8
Editor's Notes
- Thank you IFC for giving the opportunity to share in this workshop.Spire Thoughts are based our previous research findings compiled and our understanding on retailers behavior in Indonesia.We pick relevant topics surrounding Cash flow management, credit & banking in Indonesia.
- 1- Banking Habits : - Banking Service Used by Retail Store Owners (proportion of bank accounts, time of banking relationship, most used bank services)2- Cash flow management practices: - Source of capital - Payment method to suppliers3- Credit to run business: - Source of loan - Channel used to pay -Interest rate and payment period
- A research study was developed to record and document the banking habits and the management habits of the traditional retail market in Indonesia.The majority of retail store owners that have accounts in Banks have their account at BRI.
- Overall, they are more conservative, preferring to come to a branch office rather than using technology to transact.
- Personal saving is the most common source of retail store, 92 % keep the money generated in selling with themselves hidden. Description in order of most respondents:1-Personal Money: - Mostly, personal saving as source of capital. - They do not like take loan as a capital, because they do not mess around with the installment. 2- Given by husband/ family - Mostly female respondents. -They rolled the small amount of money given by family, to buy small stock items until they could buy larger stock items3- Loan from bank (KUR Products) - Some female and male respondents take KUR loan, in order to make their retail store more complete of stock. 4- Loan from cooperatives - Mostly male respondents who take loan from cooperatives around their residential. - Their offered by cooperatives officer, and also have a good relationship.
- Almost 100% of respondents make payments to suppliers with cash.- Preferenceto use cash as payment method because : -Retail store owners receive payments from their consumers with cash. -They shopped at the wholesale dealer every 2-4 days, and they do not have time to put money in the bank. -More in line with the budget. -Suppliers receive payment of a retail store with cash.-Disadvantages of using cash : -Less safe. -It takes time to calculate, particularly in the coins -Must have cash, not debt.All respondents said the disadvantages are still manageable to them