How Fintech will Revolutionize Indonesia Society
    Category: Column By : Will Ongkowidjaja Read : 753 Date : Thursday, March 01, 2018 - 22:55:53

    In January 16, chief executives across the world received a stern warning from Larry Fink, founder and chief executive of BlackRock, the world’s largest asset management firm with over $6 trillion under management. In a letter from Fink, he insists that businesses must serve a social purpose beyond delivering financial performance to continue receiving BlackRock’s support. Such a demand from a global investor is unprecedented, and as a venture capitalist that focuses on fintech, this call to drive positive change is even more critical in Indonesia where only 36% of our population has a bank account and 80% or more of our 60 million SMEs are unbankable. In fact, fintech has paved a way to make a positive contribution to Indonesian society, and here are three recent examples:

    1. Helping SMEs and individuals access credit and build credit history

    Fintech lending companies have made big impact in building creditworthiness for SMEs and individuals with limited access to finance, helping to fill Indonesia’s $70 billion financial gap. Modalku, Indonesia’s leading peer-to-peer lending company, has disbursed over $75 million of loans to over 1,200 SMEs, while UangTeman, an online microlending company, has helped over 40,500 borrowers with over $15 million microloans. By helping these SMEs and individuals obtain credit, over time Modalku and UangTeman help them build their credit history.

    2. Digitizing SMEs to achieve better livelihood

    Sepulsa, Indonesia’s pioneer distribution payment platform, partners with Indonesia’s leading telecom companies such as Telkomsel, XL and Indosat Ooredoo to digitize their traditional channel distributors, which represent over 60% of overall transaction volume. These traditional channel distributors are typically mom and pop shops type of SMEs that are accustomed to operating in a manual manner. Sepulsa provides its smartphone app to over 10,000 SMEs to operate their business more efficiently using technology, and also to increase their income by selling additional products from the Sepulsa platform.

    3. Helping Indonesia government with tax collection

    OnlinePajak, Indonesia’s leading tax application company, has made a significant impact to the Indonesian government by facilitating over $3 billion of tax payments with its 500,000 registered corporate taxpayers—including such major firms as Garuda Indonesia, Telkomsel and Astra International. OnlinePajak’s platform provides a one-stop shop solution, enabling its users to digitize such tasks as calculating income taxes, integrating data from different platforms, and paying taxes online using its payment gateway PajakPay.

    What we are seeing today is just the beginning of the positive impact that fintech can create, and I am enthusiastic there will be bigger changes to come. I would like to invite business leaders to support fintech firms to continue their quest to make an impact in Indonesia, given all of us have a social responsibility to improve our society. I hope by now businesses are awakened to do good whilst creating economic value, so we would not need another ultimatum from Fink to drive a mindset change.