March 17, 2021Indonesia
Can the often-criticized P2P Fintech platforms in Indonesia solve the lack of diversity in MSME loan programs?
Indonesia has a vibrant Fintech ecosystem, with more than 300 Fintechs innovating across different product and service categories. The lending sector is one of the most important in Indonesia and is one of the few that operates under a defined regulatory framework. There are approximately 156 lending companies as of 2020.
Recently, the Government of Indonesia (GoI), in order to help the national Economy recovery, launched the National Economic Recovery Program that authorizes the top 15 licensed banks to channel the PEN funds to designated sectors. However, in the past few years, the incumbent providers have struggled to meet their mandates for credit disbursement. Fintechs have an important role to play in the efforts toward national recovery, especially for the delivery of social assistance. P2P lenders in Indonesia can significantly complement GoI’s programs, given their ability to implement agile digital delivery processes, especially for loan origination, KYC, credit assessments, and disbursements.
