“Indonesia, just like Singapore, I think is experiencing exponential growth as echoed by the speakers today. We see that there is a very strong collaboration opportunity between the fintech players of both countries,” Chief Operating Officer of the Singapore Fintech Association (SFA) Reuben Lim said in a press release received here on Monday.
The Singapore Fintech Association and Enterprise Singapore, together with Synthesis Communication Indonesia, organized a business seminar and networking event entitled “Fintech: Fostering Cross Border Collaboration” on August 24, 2022, in Jakarta to further dissect investment opportunities in Indonesia's digital economy.
The event was attended by 18 SFA members and several Indonesian companies from various sub-sectors of the digital economy as well as representatives of many fintech companies who are members of the Indonesia Fintech Association (AFTECH).
Meanwhile, Alwin Jabarti Kiemas, the CEO of Indonesian digital signature and ID company TekenAja (VeriJelas) and the deputy secretary general of AFTECH, observed that the country’s fintech sector has matured over the past few years.
The Indonesian fintech landscape has been dominated by P2P (peer-to-peer) lending, with lending disbursement reaching Rp44.3 trillion (or around US$3 billion) as of June 2022 compared to Rp33.6 trillion in December 2021.
P2P lending firms have successfully tapped the unserved market of traditional financial institutions, especially in Java. As P2P lending has been primarily focused on Java, there is huge growth potential in the other islands.
“Before 2018, the landscape of Indonesia’s fintech sector was very simple with only two main activities of digital lending, either through P2P lending or through payment systems. But after 2018, it is expanding from digital payment and digital lending to digital capital, insurtech (insurance technology), wealth tech, and market provisioning,” Kiemas said.
The association also called for more initiatives to boost financial inclusion, including working with regional or provincial banks for working capital lending disbursement. Currently, only around 7 percent of the total regional bank loans are being disbursed properly.
Having said that, there is still around 92 percent idle money in provincial banks that can be channeled into productive credit by collaborating with crowdfunding fintech.
Moreover, of late, the government has continued to update regulations to encourage greater investment in the fintech space.
Bambang Suwarso of the Indonesian Chamber of Commerce and Industry, in his remarks, listed some dos and don’ts for foreign firms doing business in Indonesia.
“Relations among employees really matter. We need to notice that sometimes when we don’t involve or have a good discussion with them, they may be hijacked by the competitor,” Suwarso said.
Communication and common understanding among investors are also important before carrying out transactions, a partner for East Ventures, Melisa Irene, said.
She also highlighted that the B2B (business-to-business) market, in particular, offers great potential given Indonesia’s large small and medium enterprises (SMEs) sector and greater availability of data.
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Reporter: Kenzu Tandiah
Editor: Rahmad Nasution
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