Financial Spillover Effects from Electronic Government Transfers: Evidence from an At-Scale Experiment in Indonesia

In 2018, Indonesia launched a new electronic voucher system for distribution of food subsidies in randomly selected districts. Banks were assigned the goal of operating at least two remote banking agents in each village in selected districts. We find that while then new banking agents did indeed process benefit transfers—beneficiaries for both this program and other government programs were indeed able to redeem their benefits at the agents—there were no detectable impacts on any other financial services for households. We do, however, find a small increase in the number of small neighborhood shops in affected locations.