Indonesia’s Fintech Lending

Driving Economic Growth through Financial Inclusion

PwC Fintech Lending Report

PwC’s 2019 Indonesia Fintech Lending report, to be unveiled in Q2 2019, reveals behaviour of over 2,800 customers in Indonesia. Their answers can help players to be more informed on how to position themselves for the future, while at the same time, help government to assess the impact of Fintech Lending to facilitate financial inclusion in Indonesia.

Key Insights

Driving economic potential through widening access to financing

According to PwC’s “The World in 2050: Will the shift in global economic power continue?”, Indonesia is projected to be the fourth largest economy. However, one of the key elements to leverage this economic potential is by facilitating better access to financing. Last year, Indonesia’s low loan disbursement per Gross Domestic Product (“GDP”) left 74% of the middle to lower1 individuals and 74% of micro, small and medium enterprises (“MSMEs”) with a lack of financing access.

Today, given the scale of how financing access can boost consumer spending and the widening effect that it has to facilitate economic growth across all segments of Indonesian society, better access to financing is a must.

Created with Highcharts 4.0.1Percentage of Total Conventional Loan Disbursed per GDP in2017122%94%92%78%78%57%49%17%11%AustraliaKoreaNew ZealandThailandUSAJapanChinaIndonesiaIndia020406080100120140Source: International Monetary Fund.

Created with Highcharts 4.0.1Percentage of working age middle to lower Individuals with access tocredit in 2018Middle to Lower Individuals (Age 15+)71%29%No access to credit< rect x="0" y="2" width="16" height="12" zIndex="3" fill="#db536a">Have access to creditSource: Central Bureau of Statistics; PwC Analysis.
Created with Highcharts 4.0.1Percentage of MSMEs with access to credit in 2018Micro Small Medium Enterprises74%26%No access to creditHave access to creditSource: Central Bank of Indonesia; PwC Analysis.

Fintech Lending innovation as an enabler for better access of financing

Infrastructure and risk management have been one of the main reasons conventional lending providers having difficulties in providing credit access to untapped individuals and MSMEs.

The rise of Fintech Lending has enabled wider coverage of previously untapped individuals and MSMEs.

Supported by technology, different business model (e.g. peer-to-peer vs. institutional-to-peer), productive vs consumptive) and innovative approach (e.g. offline to online “O2O”). Fintech Lending is able to match different risk appetites of lenders with different risk levels of borrowers.

As Indonesia shifts to innovative, technology-driven solutions to facilitate better access to financing, creating sustainable and conducive Fintech Lending ecosystem will become crucial.

The future of Fintech Lending: Entering the "Third Wave"

Indonesia is entering the “Third Wave”, redefining a more collaborative Fintech Lending ecosystem. The “First Wave” marked the unregulated era where players were testing out business models, compared to the “Second Wave” that marked the involvement of Otoritas Jasa Keuangan (“OJK”) to ensure customer protection by establishing distinction between legal and illegal Fintech Lending players. Therefore, differing from the earlier waves of Fintech Lending, the inauguration of a self-regulating organisation known as the Fintech Lending Players Association (“AFPI”) becomes the centre of collaboration between players and regulators. As this “wave” plays out, the future of industry will be determined by the ability to bridge different perspectives of key stakeholders in the ecosystem.

Contact us

Sharly Rungkat

Partner, Jakarta, PwC Indonesia

+62 21 521 2901



Partner, Jakarta, PwC Indonesia

+62 21 521 2901


David Wake

Advisor, Jakarta, PwC Indonesia

+62 21 521 2901


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