As the Chinese do on Chinese New Year, it is common among Indonesian Muslims for older relatives to give small sums of money to younger relatives after the children wish them a happy holiday on Idul Fitri
That tradition has created a business opportunity for people such as Iphan, 32, and Rukmiyati, 34, who on a recent day were selling small change – exchanging large denomination notes for small ones, for a small fee – to customers on Jalan Gajah Mada in Central Jakarta.
“I’m actually new in this business. I just started three weeks ago. In one day, I can make 300,000 rupiah ($32) in profit,” Iphan, who is originally from Medan, North Sumatra, told Khabar Southeast Asia.
“But it depends on how many customers I get per day. Basically, I can make 5 to 15 % profit from each transaction,” he added.
Iphan explains that every day he receives as much as 10 million rupiah ($1,053) from an agent, who takes a cut of his earnings.
First, he needs to go to the bank to exchange the big notes for small ones: 1,000, 5,000 and 10,000 rupiah notes (10 cents, 50 cents and $1.05).
Because of the high demand at this time of year, Bank Indonesia, in collaboration with nine other banks, opened a mobile small-change service out of a vehicle at the National Monument (Monas) in Central Jakarta, which operated from July 23rd to August 16th.
“Every day, I need to wait in line at the small-change service in the National Monument (Monas) Park, Central Jakarta. But unfortunately, we are only allowed to change up to 5 million rupiah ($527),” Iphan said.
“So that is why I also change the money with an agent,” he continued.
Even though banks make change for free, many Indonesians patronise street vendors for their small cash needs because of the convenience.
Rukmiyati, who has been working in the business for the last four years, told Khabar that she would make less profit if she changed the money with an agent.
She said she prefers to queue at the bank to get small change, even if she has to do it twice in a single day, because the agent will take an additional cut of her profit, shaving a 15% margin to 5%.
“That is why it is better to change it in the bank,” she said.
There is another reason to rely on banks, authorities say: they can vouch that the currency is real.
Questioned about the source of her capital, Rukmiyati said she did not know where the agent got the money. She believes it came from a bank.
Difi Johansyah, a spokesman for Bank Indonesia, told Khabar that informal small-change services are not banned because there are no regulations against them.
“We are aware that there are informal money changers in public places such as traditional market or side streets. Bank Indonesia will not prohibit them from doing business. However, we suggest the citizens not change the money with an informal money changer service because the authenticity is not guaranteed,” he explained.
Many Muslim religious leaders from the Indonesia Council of Ulema (MUI) consider money changing in the street “haram”. Such transactions are forbidden in Islam because of the fees charged. But MUI has not issued any fatwa banning the practice among the Muslim community.
Iphan, who worked as a laborer for 10 years in Jakarta before losing his job six months ago, told Khabar that he sells small denomination banknotes to support his family.
“If MUI said it is haram, then that is not really my problem. I have to provide food for my family. It is very difficult to find a proper job these days, and I heard about this seasonal business so I decided to join with my friend,” he said.
Many small-change vendors in Jalan Gajah Mada wear face masks, in part because they feel a little shame, Rukmiyati said.
However, “The main reason is to avoid breathing the bad pollution as big bus and trucks are passing by this road,” she said.