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Article

Adoption of the Green Economy through Branchless Rural Credit Banks during the COVID-19 Pandemic in Indonesia

by
A. A. I. N. Marhaeni
1,*,
Kittisak Jermsittiparsert
2,
Sudarmo
3,
Lucia Rita Indrawati
4,
Andjar Prasetyo
5,
Noviati Fuada
6,
Arnis Rachmadhani
7,
Tri Weda Raharjo
8,
Heri Wahyudianto
9,
Bekti Putri Harwijayanti
10,
Jonni Sitorus
11,
Mochammad Fahlevi
12,* and
Mohammed Aljuaid
13
1
Department of Economic Development, Universitas Udayana, Bali 80361, Indonesia
2
Faculty of Education, University of City Island, Famagusta 9945, Northern Cyprus, Cyprus
3
Management Department, Sekolah Tinggi Ilmu Ekonomi Balikpapan, Balikpapan 76124, Indonesia
4
Faculty of Economics, Tidar University, Magelang 56116, Indonesia
5
Development Planning Agency of Magelang City, Magelang 56116, Indonesia
6
Organization for Health, National Research and Innovation Agency, Jakarta 12710, Indonesia
7
National Research and Innovation Agency, Jakarta 12710, Indonesia
8
Regional Research and Development Agency of East Java Province, Surabaya 60111, Indonesia
9
Regional Development Planning Agency of Papua Province, Jayapura 99225, Indonesia
10
Poltekkes Kemenkes Semarang, Semarang 50268, Indonesia
11
Regional Research and Development Agency of North Sumatra Province, Medan 20241, Indonesia
12
Management Department, BINUS Online Learning, Bina Nusantara University, Jakarta 11480, Indonesia
13
Department of Health Administration, College of Business Administration, King Saud University, Riyadh 11451, Saudi Arabia
 
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*
Authors to whom correspondence should be addressed.
Sustainability 2023, 15(3), 2723; https://doi.org/10.3390/su15032723
Submission received: 20 December 2022 / Revised: 21 January 2023 / Accepted: 30 January 2023 / Published: 2 February 2023
(This article belongs to the Special Issue Sustainable Business: Understanding the Behavior of Consumers and Employees)
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Abstract

:
A green economy has an impact on improving welfare, but it takes continuous efforts to achieve it from various fields. Contribution in the context of banking on a small scale is one of the initiatives that can show participation in achieving a green economy. This study aims to explore people’s behavior in financial transactions and analyze the practice of rural credit banks in encouraging the achievement of a green economy through the National Financial Inclusive Strategy (NFIS) program despite the COVID-19 pandemic. This study used quantitative approaches; observations were conducted at a certain time by collecting data taken directly as a complement to this study, as well as taking questionnaire data involving 363 samples and analyzing them using the structural equation model (SEM). The result is that green economic support is found in using paper for fewer savings transactions compared to branchless banking with conventional savings transactions. The high number of residents exposed to COVID-19 does not affect branchless banking. In addition, the use of branchless banking can show the penetration of financial literacy in the community. The results of the path analysis explain that perceived ease of use (7.468) and perceived usefulness (2.152) have an influence on attitude; intention is greatly influenced by attitude (15.357); and actual usage is influenced by intention (11.682). This research has specific implications for the Magelang City Rural Bank (MCRB), which needs to conduct market research to find out the potential of branchless banking that is specifically needed by the people of Magelang. Branchless banking innovation needs to be strengthened by presenting easy-to-understand and easy-to-use applications to improve the attitude of the Magelang people in adopting branchless banking applications and using them sustainably.

1. Introduction

Green economy agreements have an impact on improving people’s welfare and society [1]; however, sustained efforts from various fields are required to achieve them. The green economy is aimed at human behavior in order to manage life by paying attention to environmental aspects as a necessary habit. The main reason for the emergence of the concepts of “green economy” and “green growth” is the movement toward a more integrated and comprehensive approach to incorporating social [2] and environmental factors in economic processes to achieve sustainable development [3]. Therefore, green growth is economic growth [4] that contributes to the responsible use of natural capital; prevents, and reduces, pollution; creates opportunities to improve overall social welfare by building a green economy; and ultimately enables the achievement of sustainable development goals [5]. The green growth [5] program in Indonesia [6] promotes green investment in three priority sectors: sustainable energy [7,8], sustainable landscapes [9,10], and green infrastructure [9]. Collaboration and genuine contributions are required to increase the capacity of government institutions and state civil servants in applying green growth principles, concepts, and approaches in order to attract more green investment. The goal of collaboration and contribution is to instill green growth commitments at all levels of government, as well as improved understanding and competence in the formulation of green economy policies [7] and increased competence in integrating green growth frameworks into government work programs [11]. The form of collaboration and contribution in the banking aspect belonging to the regional government is one part of encouraging and supporting the success of a green economy.
Companies are being compelled to balance social, economic, and environmental performance through sustainable growth and development as a result of environmental challenges, laws, regulations, stakeholder demands, and the desire to obtain a competitive advantage [3,12]. Like other businesses, banks have experienced shifts in their operations due to innovations and technological advancements [13], but they have also opened up opportunities for them to become more competitive and reach financial stability. In this context, branchless banking, also known as mobile banking or m-banking, is a relatively new concept in the banking sector, which experienced rapid growth at the beginning of the 21st century [14]. Branchless banking is the delivery of banking services to customers without the use of traditional “brick and mortar” branches. The delivery of services is done from remote locations such as clients’ mobile phones, online services, and ATMs, and through third parties representing the bank, commonly referred to as “agency banking.” These services include managing accounts, doing banking transactions, and providing other detailed information. Today’s mobile technology has significantly changed the way banking operates by transforming it into accessible banking that gives unbanked people access to emerging markets and other advantages of new financial services.
Due to topological factors and banking access requirements, the Indonesian population has not been fully acquainted with, used, or obtained banking services and other financial services [15]. Therefore, the government, through the Financial Services Authority, launched the [13] National Financial Inclusive Strategy (NFIS). In this program, five main pillars are established: (1) the financial education pillar, which aims to increase public knowledge and awareness about formal financial institutions, financial products [4], and services, including features, benefits, risks, costs, rights, and obligations, as well as improve community skills in planning and financial management; (2) the pillar of community property rights, which aims to increase public credit access to formal financial institutions; (3) the pillars of financial intermediation facilities and distribution channels, aimed at expanding the reach of financial services to meet the needs of various community groups; (4) the financial services pillar in the government sector aims to improve governance and transparency of public services in the non-cash distribution of government funds; and (5) the pillar of consumer protection aims to provide a sense of security to the public in interacting with financial institutions and has the principles of transparency, fair treatment, reliability, confidentiality, and security of consumer data and information, handling complaints, and resolving consumer disputes simply, quickly, and at an affordable cost [16]. To strengthen the five pillars, a foundation [17] is also established: (1) conducive policies and regulations—the implementation of financial inclusion programs necessitates policy and regulatory support from the government and authorities/regulators; (2) supporting financial information technology and infrastructure—this foundation is required to minimize asymmetric information that becomes an impediment to accessing financial services; and (3) organizations and mechanisms for effective implementation—the diversity of financial inclusion programs necessitates policy and regulatory support from the government and authorities/regulators. The response of microfinance institutions [18]: in this case, rural banks are implementing these pillars in various ways, one of which is branchless banking.
Branchless banking is a green banking strategy that significantly benefits society by lowering environmental risks and ensuring financial transactions [14,19]. In the recent past, branchless banking attracted not only existing customers of conventional banks but also unbanked segments of society, especially from rural areas [20]. It contributes to the economy and environment by saving money, energy, fuel, stationery, labor, transportation, space, and other resources required by a physical infrastructure or conventional bank [14]. In order to promote the sustainability of the economy, society, and environment, branchless banking is extremely important. Branchless banking is becoming more popular in developing countries as a way to ensure that the unbanked poor and those in rural areas can access financial services through an already established and extensive network of retail businesses, pharmacies, petrol stations, and supermarkets.
However, the COVID-19 outbreak emerged at the end of 2019, revolutionizing all human life activities worldwide [21]. Meanwhile, banking interactions have contradictions in anticipating the spread of COVID-19. All residents are jointly required to comply with the health protocols shown [22,23,24,25,26], one of which is social distancing—the new normal [27,28,29,30,31,32]—which is the opposite of banking transactions. Therefore, efforts are needed to impact the green economy and support the NFIS program [17]. Contributions in the banking context, even though they are small in scale at the regional company level, are one of the initiatives and real contributions that can show participation in achieving the green economy and the NFIS program, while still adapting to the impact of the COVID-19 pandemic. The regional public company owned by the Magelang City Government, namely the Magelang City Rural Bank (MCRB), has an important and strategic role in supporting economic growth in Magelang City, which encourages a green economy and the NFIS in Indonesia.
Previous studies mainly focused on user acceptance of branchless banking [33,34], innovation and diffusion [19], and sustainable financial inclusion [35]. Research on intention to use and acceptance models has also been carried out by many previous studies, but the complete model of the technology acceptance model (TAM) up to actual use is very rare in branchless banking adoption research [14]. The discussion in previous research was more about sustainability and branchless banking, so that the research focused on the banking business, not on the sustainability of use from a consumer’s point of view. There is no research that discusses this phenomenon in depth to empirically prove the shift in people’s behavior during the pandemic and its impact on the adoption of branchless banking in the city of Magelang. It is important to know the context of Magelang because this city is one of the smaller cities in Indonesia and there is still very little adoption of branchless banking, unlike in previous research which was conducted in big cities, which are generally technologically literate. This research gap is important to fill by conducting the TAM framework, especially on the actual use construct to determine actual behavior. This study aims to explore people’s behavior in financial transactions and analyze the practice of rural credit banks in encouraging the achievement of a green economy and the NFIS program despite the COVID-19 pandemic.
The first chapter of the research explains the background of the phenomenon and research gaps; the second chapter explains the theories and concepts of the research model based on a literature review; the third chapter explains research and measurement methods; the fourth chapter explains statistical results and discussion; and the fifth chapter explains conclusions, implications, and future research.

2. Theoretical Foundation

2.1. Technology Acceptance Model

This research has applied a revised consumer behavior model derived from classical theory [36]. First, the researcher reviews various variables that have been analyzed in recent years in studies on branchless banking using the TAM to compare and justify the suitability of the proposed model [37]. From the results obtained after evaluating the branchless banking technology acceptance process, this study suggests various recommendations from a business perspective to increase the intention of potential consumers to use branchless banking through specific strategies [38]. Currently, most organizations in all sectors of the trade industry and government are fundamentally dependent on their information systems, so businesses will soon stop functioning if the technology that supports their activities stops [39]. Information technology is closely intertwined with business—as in industries such as telecommunications, media, entertainment, and financial services, where products are already, or are becoming, increasingly digital—and branchless banking’s existence is highly dependent on the effective application of information technology. With the advent of e-commerce, the use of technology has become a widely accepted and highly desirable way of conducting business transactions [40]. As a result, branchless banking is increasingly seeking the application of innovative technologies to provide it with a source of competitive advantage. Even in the public sector, the push towards e-government has led to greater adoption of technology to deliver services [41]. The development of value from strategic information systems, such as enterprise systems, poses significant challenges for branchless banking.
Among the classic theories that explain consumer behavior related to the adoption of new technology is the Theory of Reasoned Action (TRA), which was developed by [42,43]. In addition, there is a similar theory that can be used in this research, namely the Theory of Planned Consumer Behavior (TPB) by [44]. Both have been widely applied as major theoretical frameworks to understand and explain the adoption and use behaviors of various information systems. According to [45], “A person’s plans to use technology are based on his or her own subjective attitudes and norms, which are shaped by his or her own behavioral and normative beliefs”—TRA and TPB explained. These two are the most important and empirically supported drivers of new technology adoption and usage in any company, including banks. However, branchless banking has some traits that pertain to resilience in the social, economic, and environmental spheres. Customers may obtain information about their accounts, make money transfers, and pay their bills more easily with branchless banking, among other things. In [36], the author developed a TAM based on these theories. The TAM suggests that perceived usefulness and ease of use by individuals are factors that influence attitudes toward technology adoption and, as a result, the intention to use that leads to technology adoption. According to the model, external factors like system design, execution, and self-effectiveness through perceived usefulness and perceived ease of use have an impact on people’s intentions or attitudes [14]. The degree to which a person believes that employing a certain technology would improve his or her performance is measured by perceived usefulness. The same is true for perceived ease of use, which reveals how strongly people believe a certain technology is simple to use. This model has been applied in various fields such as usability testing, mobile payments, wireless cellular, online ticketing, mobile banking, and e-government [46].

2.2. Green Economics

A green economy is a form of economy that does not only focus on meeting people’s needs but also emphasizes its impact on the environment [47,48]. For example, branchless banking is being encouraged to be adopted because it can be a substitute for traditional banks, which are less friendly to the environment. In this case, branchless banking not only meets the needs of the community but also meets the needs of a better environment, considering that Indonesia is the highest polluter in Southeast Asia [47]. The green economy is an economic concept that has different implications from the economy in general because it prioritizes the future of natural resources, environmental welfare, and reducing the risk of using natural resources [49]. Green economics is said to be an economic practice that emphasizes long-term plans because it can reduce poverty, carbon dioxide emissions, and ecosystem degradation [50]. Through green economic growth, it is hoped that the industrial sector of the economy can be integrated to realize the responsible use of natural resources, prevent and reduce pollution, and create opportunities to increase social welfare by building a green economy.
The pattern of modern human life makes development very exploitative of natural resources and threatens the lives of other living things. Economic activities, which include production, distribution, and consumption, cause greenhouse gas emissions to increase, thus causing a reduction in forest areas and the destruction of various species and biodiversity [51]. This is because the concept of common property resources can be used to answer why economic activity can lead to environmental damage [52]. Millions of owners have the same right to utilize common property resources, such as oceans, air, fish in the sea, land, water, forests, and so on. There is no single rule that limits the use of these shared resources, so there is overexploitation of these resources. Every beneficiary, both producers and consumers, may use it as much as possible, with the assumption that other people will take advantage of these resources if they are not used as fully as possible. Based on the economic lens, misuse of the utilization of common property resources arises because there is no self-generating balancing mechanism that can limit exploitation [53]. Excessive exploitation can undoubtedly result in a variety of pollution and environmental problems at both the global and local levels. Banks may also lessen the harmful effects of their services and products on the environment. By reusing the waste items, they may reduce the amount of packaging that harms the environment and promote recycling initiatives [33].
The overlay visualization in Figure 1 presents that in previous studies there were important topics that required deeper discussion related to branchless banking; in Figure 1, traces of research history can be seen, such as banking, branchless applications, financial institution branches, financial innovation, financial inclusion, and agents. Branchless banking allows banks to expand their network to the public while using minimal infrastructure [51]. This program will be successful when the parties involved also carry out risk control. Banks in Indonesia continue to improve their services by adding customer service points, especially through digital access, which played a very important role during the pandemic. As a form of adjustment to business development following the shift in customer transaction behavior to digital channels, especially during this pandemic, banks have also made adjustments to their office network strategy. Banks began reducing the number of branch offices in order to optimize service to customers, taking into account the level of digital penetration in each location. However, banks also opened several new sub-branch office networks to be able to reach business areas that had not been served by their bank. Banks have expanded access through digital platforms, in addition to reducing the number of branch offices.

3. Methods

This study used quantitative approaches. The research location is in the working area of the MCRB, Magelang City, Central Java Province, Indonesia. The branchless banking sample starts from January 2020 to July 2022, while the quantity of COVID-19 in Magelang City is from June 2020 to September 2021. The obtained branchless banking sample consists of 75 schools, markets, and flats classified as economic, social, and educational. The sample quantity of COVID-19 in Magelang City is categorized as total positive cases (confirmed); total death; fully recovered; and still sick (active positive). The data collection technique was sourced from secondary data from savings managers using the branchless banking model and COVID-19 data from the Magelang City COVID-19 Task Force, while the primary data were taken from MCRB customers.
COVID-19 data refer to sources from the Magelang City COVID-19 Task Force after tabulation, a description of which can be narrated for sixteen months. At the beginning of the recording (from the end of December 2019 to May 2020), coordination and institutional formation were still being carried out, until it became the Magelang City COVID-19 Task Force, so complete data was not yet available. Meanwhile, after July 2021, there was a decrease in COVID-19 victims, and vaccinations for the community were carried out, so the government shifted its focus from handling COVID-19 to economic recovery. As a result, the data is current until September 2021. An analysis was performed through a description of the data obtained, followed by a comparison of the accumulation of savers in branchless banking and the number of positive (confirmed) and recovered cases from COVID-19, and concluded at the end of this study with recommendations that can be used as an option for branchless banking management.
This study uses a structural equation model (SEM) [54], which consists of 5 constructs: i.e., attitude [36,37], intention [37], perceived ease of use [55], perceived usefulness [56], and actual usage [55] (see Table 1). This research is part of a non-probability sampling using the snowballing method, involving 418 respondents using an online questionnaire. Three types of responses were screened: first, those who were not leaders or business owners (418); second, those who filled out the questionnaire in less than 2 min (381); third, the results of filling out all items have almost the same value (363). After filtering out poor data, there were 363 valid questionnaires.

4. Results and Discussion

4.1. Branchless Banking in Urban Residents

The community’s need to obtain financial transaction services is limited by distance and time (this has become a new behavior in society, which requires efficient and fast services; they do not have to bother allocating time specifically to obtain services) [57]. This need later became MCRB’s choice to answer the problem of the community’s needs in obtaining economical and fast financial transaction services through branchless banking services, either by “picking up the ball” or visiting them directly. The flow of the branchless banking service system is supported by facilities in the form of simple and inexpensive devices such as smartphones and portable wireless printers. The transaction process involved MCRB officers visiting customers consisting of small traders, market traders, students, and government agencies. The smartphone has installed the mobile version of Integrated Banking System (IBS) software and is connected to the internet network with IBS at the head office. This software is used to download and upload data on financial transactions carried out at that time, both financial transactions in the form of creating a new account and saving, taking, and depositing credit (loan) installments. After the transaction is made, the customer gets proof of the transaction in the form of a transaction slip.
At the beginning of the application, problems were found with the internet connection, which affected the performance of the system when it was used for transactions. The evaluation was carried out to obtain a solution to move the independent system process onto a smartphone during transactions with customers. Bank officers, when returning to the office, are required to synchronize with the existing system. The objectives of branchless banking services are as follows: (1) improving the quality of financial transaction services quickly and efficiently; (2) improving the accessibility of people who have never received banking services; (3) improving the financial literacy of business actors in general and SMEs [49] in particular; and (4) improving financial literacy among students regarding the importance of saving from an early age. Meanwhile, in terms of the benefits obtained by the community, it is acquiring financial services efficiently and quickly.
Meanwhile, for the community, as customers who are the target of branchless banking in Magelang City, there are potential economic resources in the form of five traditional markets with a total of 4423 market traders; nineteen culinary centers with a total of 532 small traders; and 8000 SME players who contribute to the economic growth and development of the City of Magelang [50] and require fast and efficient financial transaction services. At the level of implementation of branchless banking socialization, it is carried out informally with a mechanism; bank officers visit prospective customers at locations where customers are located, and a user-friendly system provides convenience in the transaction process. Transaction facilities that can be accessed are in the form of transactions for depositing and withdrawing savings, paying installments for customers who have loans, and developing credit facilities. For the saving process, the customer is not limited in the amount, but to make savings, the customer is limited to a maximum of two to three million IDR, due to security reasons for bank officers when carrying money in cash and referring to the rules that have been standardized in Indonesia. There are eight bank officers deployed to pick up transactions for customers who provide services to the 6202 registered account numbers and the 2536 active account numbers. The classification of customers who access the service is divided into students, with as many as 1386 account numbers; small traders, with fifty-seven account numbers; market traders, with 207 account numbers; and general traders, with 886 account numbers.
The difference in the number of savings in the three categories in Figure 2 shows that for the economic sector, the savers come from fourteen groups. This group includes traders who are in culinary centers and traditional markets. For the education category, there are fifty educational institutions with various levels, ranging from kindergarten, elementary school, junior high school, to high school. Then, for the social category, ten groups are dominated by the people who occupy the flats, assisted by the Magelang City Government. An interesting concept for branchless banking in the social category is the emergence of community cooperation to own their own houses by saving collectively. Residents who occupy flats take turns getting a down payment for their own house because flats can only be occupied through a rental system. The highest number of banking transactions is in the economic sector, with an average monthly transaction of IDR 3,087,933,632, followed by the social sector at IDR 1,069,989,495, and the education sector at IDR 246,289,595. Furthermore, in more detail, the transactions of each customer in one month, the number of transactions in one day, and the transactions of each customer in one day from the economic, social, and educational sectors are presented in Table 2.
There are quite prominent differences between the economic and education sectors. This is based on the findings of interviews, which explain that in the economic field, customers tend to make transactions because of the need to provide funds in the future for trading transactions. While the education sector refers to the provisions of [17], the goal is not how much money is put into savings accounts by school students.; instead, the goal is how many accounts they have.
The number of account numbers that access branchless banking in each field category is the opposite of the amount of money transacted. Figure 3 shows that the average number of account numbers is owned by students, reaching 4038 account numbers, while the economic sector category is at 410 account numbers and the social sector category is at 389 account numbers. In the category of education, as detailed in the structure of education levels, it is dominated by twenty-eight units of junior high school or equivalent; then elementary school or equivalent with as many as fifteen units; high school or equivalent with as many as five units; and kindergarten or equivalent with as many as two units. The equivalent is a school that is not managed by the government and is based on religion or foundation. It was found that this number of schools has the potential to expand the reach of financial literacy, considering that there are still schools that have not become the locus of branchless banking, especially upper secondary schools managed by the government.

4.2. Quantity of COVID-19 in Magelang City

The description of the COVID-19 pandemic in Magelang City refers to the Magelang City COVID-19 Task Force based on the number of victims categorized as “total positive cases” (confirmed), namely the number of victims who have been declared infected; “total deaths” is the number of victims who died due to COVID-19; “fully recovered” is the number of people who have contracted COVID-19 but have been declared negative after undergoing self-isolation and/or isolation from the Magelang City local government; and “still sick (active positive)” is the number of victims who are struggling to recover from COVID-19.
The handling of COVID-19 in Magelang City is carried out by referring to the tiered provisions of the Central Java Province COVID-19 Task Force and the National COVID-19 Task Force. Figure 4 depicts the peak condition of the population exposed to COVID-19 in July 2021, when it reached a total of 5779 confirmed positive cases, but for victims who recovered completely, it was nearly equal to the total number of confirmed positive cases of 5670, or 94.78%. In the same month, the number of victims who were still sick (active positive) was 299, and those who died from COVID-19 reached 243. The number of people who recovered from COVID-19 was supported by the coordination of the team in the Magelang City COVID-19 Task Force and the community’s compliance in carrying out health protocols in the form of work from home, social distancing, and adaptation to the new normal. In addition, vaccination has been carried out in stages, with the first vaccination carried out starting in February 2021 and the second vaccination carried out starting in March 2021 using the SINOVAC vaccine.

4.3. COVID-19 Victims vs. Branchless Banking Customers

The relationship between city residents exposed to COVID-19 and the number of accounts owned by the community also has no influence. Connecting Figure 3 and Figure 4 to Figure 5, it can be seen that, quantitatively, the number of accounts that access branchless banking shows a relatively stable condition when compared to people exposed to COVID-19. Although the number of people exposed to COVID-19 has an increasing trend from June 2020 to September 2021, the time dimension in Figure 4 is shown from June 2020 to September 2021 for the number of people exposed to COVID-19 who were positively confirmed and the number of people exposed to COVID-19 who had recovered. In addition, a recapitulation of the number of customers accessing branchless banking conducted by MCRB is presented to show the relationship between the two quantities.
The average number of those who make transactions is 4837 account numbers (Figure 4), with details of 410 account numbers coming from the economic sector category, the social sector with as many as 389 account numbers, and the education sector with as many as 4038 account numbers. The stable trend of transactions by customers is because bank officers serve customers by arranging periodic visits to all locations. In addition, coordination has been carried out for each customer, especially in the education sector. The school has first collected customers who will carry out transactions to minimize the presence of crowds that have the potential to cause the spread of COVID-19.

4.4. Path Analysis

In this study, the adoption of branchless banking was measured using SEM to determine the level of adoption of branchless banking in Magelang. An outer model test was performed in the preliminary test, which included convergent validity with a value on each item that reflected a construct greater than 0.7, average variance extracted (AVE) greater than 0.5, discriminant validity with a Cronbach alpha value and composite reliability greater than 0.7, and, finally, collinearity by variance inflation factor (VIF) greater than 5 [54,58]. All tests have been carried out, and the model adopted from TAM has passed the outer model test, so that in the next step, bootstrapping can be done with 5000 subsamples [54].
The perceived ease of use (PE) construct consists of five items, the perceived usefulness (PU) construct consists of six items, the attitude (AT) construct consists of five items, the intention (IT) construct consists of four items, and the actual usage (AU) construct consists of three items (see Figure 6). Based on the bootstrapping results above, the path analysis results are compiled in Table 3 below:
In the Table 3 results above, it is known that all constructs in this model have a positive and significant influence. PE to AT has a coefficient value of 0.652; sample mean is quite large at 0.642; standard deviation is quite small at 0.087; T-statistic is 7.468; and p-value is 0.000. These results explain that there is a positive and significant effect between PE on AT. PU to AT has a coefficient value of 0.168; sample mean is very small at 0.181; standard deviation is quite small at 0.078; T-statistic is 2.152; and p-value is 0.016. These results explain that there is a positive and significant effect between PU on AT. AT to IT has a coefficient value of 0.720; the sample mean is quite large at 0.722; the standard deviation is very small at 0.047; the T-statistic is 15.357; and the p-value is 0.000. These results explain that there is a positive and significant influence between AT on IT. IT to AU has a coefficient value of 0.584; sample mean is quite large at 0.590; standard deviation is quite small at 0.050; T-statistic is 11,682; and p-value is 0.000. These results explain that there is a positive and significant influence between IT on AU. The statistical results in detail can be seen in the histogram in Figure 7 below:
From the results of the histogram path coefficient above, it is known that the largest coefficient is found in the effect of AT on IT, which can be observed from the histogram’s inclination to the right side compared to the influence of other constructs in this model. Based on these results, it can be seen that attitude greatly influenced the intention of adopting branchless banking for customers in Magelang during COVID-19.

4.5. Discussion

The capacity and ability of the MCRB to promote financial literacy have a positive portrait. This is because potential segments—economic, social, and education—have been reached, although not entirely. However, the sustainability of branchless banking implemented by MCRB provides evidence of the findings that branchless banking can be a solution for the regional economy and the adoption of a green economy [59] These results are in accordance with research conducted by [14,60,61]. This can run regularly because of institutional legitimacy, customer understanding, and an easy transaction system for customers. Simultaneously, the contribution to the implementation of the green economy also shows sustainable participation, which is technically indicated by the low use of paper as proof of transactions when customers deposit money, make money, or pay credit installments owned by customers (generally small traders, SMEs, and market traders), and these results are in accordance with research conducted by [34,62]. The TAM model is able to explain that the factors contained in the model—namely PE, PU, AT, and IT—are able to explain AU significantly and strongly, which can be seen from all the hypotheses accepted in this study. These results are in accordance with research conducted by [14,60,61].

4.6. Customer Satisfaction with Branchless Banking

Branchless banking services generally consist of several basic banking services, such as ease of depositing and withdrawing money, credit management, fund transfers, account inquiries, etc. These services also allow their users to operate in areas that are active in economic, social, and educational activities that cannot be achieved by every bank. Instead, banks can expand their services and maximize their market share by creating robust banking solutions. This will promote economic growth and local development by enabling individuals and communities to access essential financial services. Several conditions can be seen from the perspective of customer satisfaction in this study: first, the priority of financial inclusion has become the agenda of many countries in the world, which target rural areas that are difficult to reach and that do not have bank accounts. Meanwhile, opening a bank branch often comes with high costs.
The condition of banking services requires customers to visit physical branches, which requires time and distance to take advantage of banking services. In terms of financial inclusion [63], banks quickly realized the need to take advantage of branchless banking’s potential to advance in the competition for financial products [4]. MCRB customers can easily access branchless banking services because officers meet/visit customers regularly, thus more customers can access banking services without hassle. Second, the readiness of information technology [64] owned by MCRB, in the form of an internal server that manages branchless banking, provides ease of transaction processing due to the typology of Magelang City, which has an area of 18.54 Km2, consisting of three sub-districts and seventeen villages, relevant to [65]. From a customer perspective, there is an increasing adoption of, and education on, financial literacy. Barriers to financial inclusion start with the nearest bank branch of another customer; unsuitable service times for merchants or schoolchildren; or banking that is too burdensome for customers with limited financial literacy. Branchless banking flattens these barriers. Customers are characterized by more and more people opening bank accounts, having long-term potential, and accessing the banking facilities they ordered. Branchless banking can create community satisfaction because there is transparency and accountability in the flow of the required financial services. Third, financial literacy maturity: breaking the chain of access to informal financial mechanisms that will harm consumers is an important point in financial literacy maturity. The capacity and ability of bank officers formally practiced in an informal approach can satisfy financial literacy skills for customers and the community, and at the same time can also help the community in overcoming the challenges of traditional banking due to the benefits of branchless banking.

4.7. Branchless Banking Effectiveness in the Green Economy

The surprising benefit of branchless banking, although branchless banking relies heavily on a network of eight MCRB officers, can provide MCRB customers with access to basic banking services, such as depositing, transferring, or withdrawing funds. This simplifies and streamlines public access to services and benefits that are beyond the reach of customers. Branchless banking has the potential to offer banking services in markets, schools, flats, and other community environments that do not have bank accounts outside of traditional bank branches.
In Figure 8, the network visualization shows the network between terms, which is visualized based on research on branchless banking in Indonesia in general. The discussion on branchless banking is closely related to several key terms, such as fintech, payment systems, e-money, performance expectancy, models, e-wallets, and cashless payment systems. Bank officials have effectively bridged the gap between banks and the unbanked masses in urban, and even rural, communities, relevant to [66]. These MCRB officers can act as bank representatives and can play a leading role in promoting financial inclusion [63]. Some of the benefits of branchless banking are: (1) a better image of the institution in various strata of society. Branchless banking offers an extraordinary opportunity to service institutions in a way that creates a simple, familiar, and interactive business image. In branchless banking, the institution, through its officers, can assure customers of the transparency of the MCRB; (2) customer understanding is formed and improved, and branchless banking allows banks directly at the customer’s location by maintaining health protocols. MCRB customers do not have to wait in long queues to access banking services. Customers are routinely visited by officers to carry out banking operations, with clear product presentation, fast integration process, and demonstration of the latest features that can drive better financial literacy for customers. In addition, customers already know the officers well, thereby minimizing doubts about conducting banking transactions, creating trust [67] in the minds of customers; (3) guaranteed security [68] that is fast and systematic because the mechanism created requires bank officers to synchronize with a centralized system in the office after officers make visits to customers for customer banking transaction needs; (4) easily accessible for customers. With the branchless banking application, customers can easily withdraw, even though the amount is limited, and deposit money from the customer’s bank account, which is legalized [69] with printed evidence in the form of a receipt via a portable printer brought by a bank officer following the applicable commercial rules; (5) the object of financial literacy is wider in scope because it can serve the population of people who do not have bank accounts, disabilities, and people who do not have smartphones. The branchless banking practice carried out by MCRB, in the perspective of innovation [70], is also one of enrichment of innovation in financial inclusion.

5. Conclusions, Implication, and Suggestion

The smooth practice of branchless banking in the MCRB of Magelang City has found that there are differences in the economic, social, and educational fields which are inversely proportional to the amount of money transacted against the number of account numbers held by customers. This difference is due to differences in customer tendencies which are categorized in the economic, social, and educational fields. In the economic field, there is a tendency for business interests; in the social sector, for cooperation interests; and in the education sector, financial literacy education is found. Another finding on the implementation of branchless banking by the MCRB was carried out with officers from the MCRB, so that customer legitimacy was stronger. The COVID-19 pandemic did not affect the public interest in Magelang City to conduct transactions with branchless banking; at the same time, branchless banking which was built by MCRB was able to contribute technically to encourage a green economy.
This research has specific implications for the MCRB, which needs to conduct market research to find out the potential of branchless banking that is specifically needed by the people of Magelang. Branchless banking innovation needs to be strengthened by presenting easy-to-understand and easy-to-use applications to improve the attitude of the Magelang people in adopting branchless banking applications and using them sustainably. The existing branchless banking needs to be developed to enable banking and other financial services to reach all levels of society throughout Magelang. MCRB needs to have a program that aims to provide financial products that are simple, easy to understand, and in accordance with the needs of people who have not been able to access financial services. In addition, this program also launched community economic activities so as to encourage economic growth and equitable distribution of development between regions in Magelang, especially between villages.
This research has limitations, namely, that the sample used is relatively small and homogeneous. The analytical tool used is predictive because the model developed is tied to the context of Magelang City itself. The research only focuses on branchless bank customers in Magelang. Future research can involve more respondents for more precise results and can use several cities as comparisons, especially using multi-group analysis.

Author Contributions

Conceptualization, A.A.I.N.M. and A.P.; methodology, M.F.; software, K.J. and S.; validation, M.A., J.S., and A.R.; formal analysis, T.W.R. and S.; investigation, H.W.; resources, B.P.H.; data curation, N.F. and S.; writing—original draft preparation, A.A.I.N.M. and A.P.; writing—review and editing, M.F. and M.A.; visualization, A.P. and K.J.; supervision, M.F. and L.R.I.; project administration, M.F. and A.P.; funding acquisition, M.A. All authors have read and agreed to the published version of the manuscript.

Funding

This research was funded by Researcher Supporting Project (RSP2023R481), King Saud University, Riyadh, Saudi Arabia.

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Informed consent was obtained from all subjects involved in the study.

Data Availability Statement

The original contributions presented in the study are included in the article; further inquiries can be directed to the corresponding author.

Acknowledgments

We would like to extend our appreciation to King Saud University for funding this work through the Researcher Supporting Project (RSP2023R481), King Saud University, Riyadh, Saudi Arabia.

Conflicts of Interest

The authors declare that they have no competing interests.

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Figure 1. Overlay visualization. Source: VosViewer Output (2023).
Figure 1. Overlay visualization. Source: VosViewer Output (2023).
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Figure 2. The number of transactions per field per month from January 2020–July 2022.
Figure 2. The number of transactions per field per month from January 2020–July 2022.
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Figure 3. The number of accounts per field per month from January 2020–July 2022.
Figure 3. The number of accounts per field per month from January 2020–July 2022.
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Figure 4. Magelang City COVID-19 data, June 2020–September 2021.
Figure 4. Magelang City COVID-19 data, June 2020–September 2021.
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Figure 5. Magelang City COVID-19 vs. number of account branchless, June 2020–September 2021.
Figure 5. Magelang City COVID-19 vs. number of account branchless, June 2020–September 2021.
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Figure 6. Path analysis.
Figure 6. Path analysis.
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Figure 7. Path coefficients histogram.
Figure 7. Path coefficients histogram.
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Figure 8. Network visualization. Source: VosViewer Output (2023).
Figure 8. Network visualization. Source: VosViewer Output (2023).
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Table
Table 1. Measurements.
Table 1. Measurements.
ConstructsDefinitionDimensionItemScale
Attitude (AT)
[28,29]		Attitude toward adoption is a cognitive process that describes a potential adopter’s positive or negative attitude about adopting a foreign technologyStrengthI don’t think I need help from other people in accessing branchless banking (AT1)Likert
AccessibilityI believe the branchless banking step-by-step navigation is easy to understand (AT2)
I believe learning to use branchless banking is easy (AT3)
AmbivalenceI like it when payments can be made quickly (AT4)
I believe it’s easy to transfer money through branchless banking because the steps are quite practical (AT5)
Intention (IT)
[29]		Behavioral intention to use is a behavioral tendency to continue to use a technology. BI refers to the consumer’s intention of effective use of a future product or serviceCustomer LoyaltyI want to make transactions using branchless banking in the near future (IT1)Likert
It is very possible to use my smartphone for branchless banking (IT2)
Willing to Pay MoreI will use branchless banking a lot in the future (IT3)
Word of Mouth (WOM)I intend to recommend others to use branchless banking (IT4)
Perceived Ease of Use (PE)
[47]		Perceived ease of use is a belief about the decision-making process in using information technology. A person’s perception of the ease of use of information technology shows the extent to which that person believes that using a technology can facilitate the completion of work/tasksClear and UnderstandableI believe the use of the branchless banking application is easy to understand (PE1)Likert
I believe learning to use branchless banking is easy (PE2)
Mental EffortI like the fact that payments made via online require minimum effort (PE3)
Easy to UseI am sure of the ease of online payment for all transactions (PE4)
Overall, branchless banking is easier to use than transactions at traditional banks (PE5)
Perceived Usefulness (PU)
[48]		Perceived usefulness is defined as an individual’s perception of using new technology that can improve performance. Applying this definition to the context of a digital wallet in its use refers to the degree to which consumers believe using a digital wallet as a medium will increase their performance or productivity, thereby enhancing the outcome of their shopping experiencePerformance OutcomeI think using branchless banking allows me to complete transactions faster (PU1)Likert
I believe branchless banking wallets are useful for making online transactions (PU2)
Personal OutcomeI believe using branchless banking increases the efficiency of my online transactions (PU3)
In my opinion, branchless banking is acceptable in all e-commerce (PU4)
Instrinsic MotivationI believe branchless banking improves the quality of online transactions (PU5)
Overall, I think branchless banking improves my performance (PU6)
Actual Usage (AU)
[47]		Actualization of use is a real condition of system application. Someone will feel happy to use the system if they believe that the system is not difficult to use and proven to increase their productivity, which is reflected in the actual conditions of useContinuityI do transactions in branchless banking quite often on a daily basis (AU1)Likert
ActivityI use branchless banking actively at the time of the transaction (AU2)
I will choose branchless banking for online transactions (AU3)
Table
Table 2. Average transactions and customer accounts.
Table 2. Average transactions and customer accounts.
DescriptionEconomic FieldSocial FieldEducation FieldGrand Total
Transactions per month (IDR)3,087,933,6321,069,989,495246,289,5954,404,212,721
Per customer/month (IDR)7,552,6602,877,84558,572917,020
Transactions per day (IDR)102,012,973 35,361,992 8,134,703 145,509,668
Per customer/day (IDR)249,473 95,117 1934 30,294
Source: Analysis Results, 2022.
Table
Table 3. Path Coefficients.
Table 3. Path Coefficients.
Original Sample (O)Sample Mean (M)Standard Deviation (STDEV)T Statistics (|O/STDEV|)p Values
AT -> IT0.7200.7220.04715,3570.000
IT -> AU0.5840.5900.05011,6820.000
PE -> AT0.6520.6420.08774680.000
PU -> AT0.1680.1810.07821520.016
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Marhaeni, A.A.I.N.; Jermsittiparsert, K.; Sudarmo; Indrawati, L.R.; Prasetyo, A.; Fuada, N.; Rachmadhani, A.; Raharjo, T.W.; Wahyudianto, H.; Harwijayanti, B.P.; et al. Adoption of the Green Economy through Branchless Rural Credit Banks during the COVID-19 Pandemic in Indonesia. Sustainability 2023, 15, 2723. https://doi.org/10.3390/su15032723

AMA Style

Marhaeni AAIN, Jermsittiparsert K, Sudarmo, Indrawati LR, Prasetyo A, Fuada N, Rachmadhani A, Raharjo TW, Wahyudianto H, Harwijayanti BP, et al. Adoption of the Green Economy through Branchless Rural Credit Banks during the COVID-19 Pandemic in Indonesia. Sustainability. 2023; 15(3):2723. https://doi.org/10.3390/su15032723

Chicago/Turabian Style

Marhaeni, A. A. I. N., Kittisak Jermsittiparsert, Sudarmo, Lucia Rita Indrawati, Andjar Prasetyo, Noviati Fuada, Arnis Rachmadhani, Tri Weda Raharjo, Heri Wahyudianto, Bekti Putri Harwijayanti, and et al. 2023. "Adoption of the Green Economy through Branchless Rural Credit Banks during the COVID-19 Pandemic in Indonesia" Sustainability 15, no. 3: 2723. https://doi.org/10.3390/su15032723

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