Online Loans in Indonesia Introduce Business Capital Solution for MSMEs, Business News
JAKARTA, March 18, 2019 – (ACN Newswire) – The rapid development of the Indonesian fintech industry, especially in the online lending sector, has brought some fresh air, especially for micro, small and medium enterprises (MSME). With the presence of online lending fintech, the MSME industry can continue to grow.
“Opportunities for cooperation have arisen between fintech players and the financial services sector, including savings and credit cooperatives as well as government institutions engaged in financing. Collaboration is necessary to ensure operational efficiency. and the reduction of interest rates, especially for our main borrowers, businessmen ”, explains Braman Setyo, general manager of LPDB-KUMKM (Agency for the management of revolving funds for cooperatives and small and medium-sized companies) in Indonesia.
According to Braman, the government views the rapid development of online lending fintechs in an open and positive manner, and with the increasing variety of online lending services, the capital needs and requirements of MSME players, especially those not bankable, should be satisfied.
“This is because many fintechs are engaged in financing productive sectors, and this could be a potential for non-bankable sectors to also access corporate sector financing, including access to LPDB financing through fintechs in the future, ”says Braman.
Kusnaeryah, daily president of the Indonesian FinTech Joint Financing Association (AFPI), says the presence of FinTech in Indonesia has brought financial inclusion. “The presence of P2P Fintech loans is specifically aimed at reaching people who are not covered by the loans because they do not meet the criteria of banks and finance companies.”
In addition, innovative fintechs are using data and alternative credit scoring to extend their coverage. “With a credit deficit reaching 1,000 billion rupees per year, the chances of fintech growth are very high. Especially now that fintech is increasingly and actively collaborating with banks and financial companies,” a- he declared.
Kusnaeryah adds that the current presence of fintech can boost MSMEs – not just talk, but a state of affairs that has been proven by the presence of P2P fintech lending in various segments. “There is a capital storage platform that finances traders around the network of convenience stores, there are those who finance the farmers’ supply chain.
“There are tanifunds, which finance the agricultural supply chain. There are fintags that finance the maritime sector, there are capital companies that finance mothers in eastern Indonesia with the Grameen Bank model, ”he continues.
“The presence of Modalku (MyCapital) and Accelerant has met the productive financing needs of the business segment from IDR 500 million to IDR 2 billion. Even creative sector entrepreneurs such as event planners now have funding opportunities from P2P lending platforms such as Investree, ”he said.
As of December 31, 2018, 88 fintech lending companies were registered in the Financial Services Authority (OKJ) database. According to Aidil Zulkifli, CEO of Indonesian pioneer fintech lender UangTeman, these 88 fintech lending companies take their platform seriously and comply with all applicable regulations.
“Every regulation issued by regulators has the positive effect of ensuring the sustainability of the fintech lending industry, as well as securing the rights and obligations of clients and platforms. Those who are registered are obligated and comply with these regulations,” Aidil explains.
In addition to complying with applicable regulations, fintech lending companies constantly socialize their borrowers to ensure that they are able to understand the rights and obligations they must adhere to while receiving loans.
“Customers who borrow from UangTeman come from a variety of backgrounds including MSMEs. For us, they should always be educated directly or through various media in order to understand the terms and conditions of online loan application so that they can avoid situations which could make it difficult for them, ”Aidil added.
In addition to education on terms and conditions, clients who borrow from UangTeman are also encouraged to use the funds obtained for productive purposes, as the positive use of these loans can provide cumulative benefits to borrowers.
“We are certainly very proud to be able to help improve financial inclusion in Indonesia, especially for those in the MSME sector. We will continue to encourage all clients to make positive use of the loans obtained, ”explains Aidil.
Aidil urges everyone to be aware of illegal online lending platforms; Take a close look at the validity and legality of the online lending platform they might consider using. “If someone borrows on a registered platform, they will join a community and feel more secure because their consumer services are certainly regulated by the OJK,” concludes the head of UangTeman.