The Comparison Between The Uses of Branchless Banking in Urban and Rural Areas: Geographical Perspective

Branchless Banking is an ICT-based service provided by banks through the provision of agents. The agents are spread in several locations, both in urban and rural areas. This paper is part of a study on The Perceptions of Space and Locations of Urban and Rural Communities: Implications for the Development of Branchless Banking. However, this paper only focuses on how community makes use of branchless banking by comparing its conditions in urban and rural areas and its relations to the field of geography. The area studied in this research are Kulon Progo Regency and Yogyakarta Municipality that located in Yogyakarta Special Province, Indonesia. The method used in this research is quantitative method. The data are collected by structured interview especially to the agent and customers of branchless banking. The agents and customers of branchless banking coordinate locations used as input for spatial density analysis. The other geographic perspective is accessibility analysis using cost distance, this analysis developed from combining Euclidean distance of road and settlement, and slope. The result shows that the use of branchless banking is based on the factor of location that is closer to where they live and how easy the access is. In addition, there are also convenience factors, such as unlimited time for services and familiarity in accessing. Regarding the reasons for the utilization of Branchless Banking in Rural and Urban is almost the same, but for the city of Yogyakarta, the location factor plays a role, while in Kulon Progo the comfort factor is also a consideration. In both urban and rural areas, branchless banking agents are mostly located in residential area. Agents are highly used in the location that is far away from economic services, especially banks. It also shows the same pattern if evidenced by spatial density and accessibility analysis. The perception of societies related to the distance qualitatively has similarities with the results of spatial analysis of density and accessibility. The presence of ICT in banking services in the form branchless banking through an agent can add the concept of banking service development that is not always in the city center, but it can also be rural areas.