Benedicto Haryono, Co-Founder and CEO of KoinWorks
In 2018, the Indonesian economy was said to record a growth rate of 5.2 per cent, making it the highest in five years, all in spite of a slump in the rupiah and a trade imbalance. According to Oxford Business Group’s The Report: Indonesia 2019, the country’s emphasis on industrialisation and infrastructure development helped lay the foundations for continued economic growth.
According to the former Minister of Communications and Informatics Rudiantara, Indonesia still has a huge untapped market by any new business processes and that the country can take account in the fact that it has around 80 million Millennials with 65 per cent of them having access to the internet just in 2018.
“It’s more than any market in Southeast Asia and the government is ready to maintain the purchasing power of its people,” Rudiantara said during his keynote speech in Nexticorn International Summit 2019 in November last year.
So with the positive outlook on financial and overall economic power of the country and its people, online P2P lending platforms are one of the multiple types of fintech that will thrive, especially when it addresses the immediate need for financial inclusion by providing access to an underserved market, such as SMEs.
KoinWorks, an Indonesia-based P2P lending fintech startup, claims to be the P2P lending company that owned the majority of the retail lending market in the country. In 2016, the company received its operational permit from the Financial Services Authority (Otoritas Jasa Keuangan, OJK).
In 2018, it announced a total of US$15.7 million funding led by Mandiri Capital Indonesia (MCI), with Gunung Sewu and Convergence Venture taking part.
At that time, as reported by e27, the company used the funding to focus on developing a “safe, innovative, and relevant finance platform and financial products for digital SMEs in Indonesia”, something that they have been working on for the past two years.
“Seeing that almost every SMEs have adopted the digital market, this is a market potential that KoinWorks has been focusing on. We aim to have financial inclusion in the country,” said Benedicto Haryono, Co-Founder and CEO of KoinWorks.
Combining the rapid growth of smartphone usage in Indonesia and its affordable and risk-transparent investment offer (as little as US$6.80), the company believes that it can change the public’s behaviour towards investment. KoinWorks aims to bring its existing products one step further by introducing what it called a “Super Financial App” in the near future.
Below is the edited excerpt of e27‘s conversation with Haryono:
What was the idea and consideration behind turning into Super Financial App?
With the rapid growth of technology, we’re willing to continue innovating and evolve into more than just a P2P platform, to serve the market even better and compete with other players.
The initial idea of the new evolution was to design a multifunction app that serves purposes of lending, borrowing and investment alternatives. We’re adding and developing more products gradually and present them in 2020.
How does this differ you from your competitors?
We no longer differentiate the access for borrowers and lenders; they can access diverse financial needs in one platform.
Lenders can start investing from IDR100,000 (US$7.32). The objective is to engage more millennials, who are our target market and to make sure we can provide easy access for users.
Furthermore, we also provide multiple investment alternatives with various grades to cater to lenders’ risk preferences.
What about on the lending side?
On the lending side, we focus to support digital SME both running in e-commerce or social commerce. With the latest feature, we can group the loan according to each lenders’ social interest for funding purposes, such as Woman Led, Made in Indonesia, and more.
Aside from that, we provide student loans for formal and non-formal education purposes.
We’re still the financial platform with the largest numbers of retail lenders and borrowers with almost 270,000 lenders and over 200,000 borrowers.
Due to the nature of our users and what they want, we provide the app that combines the functionalities and added products to answer the needs of our users to help them find more solutions.
How does the “Super Financial App” work?
In the current app, we don’t differentiate borrowers and lenders like we used to. They all merged into users and they can access various financial solutions in just one platform.
We have several running products, which is more than what we offered on a previous app. There are loan marketplace KoinP2P, an automation lending activity with social touch KoinRobo, and business loans up to IDR2 billion (US$146,000) KoinBisnis.
Also Read: P2P lending fintech startup KoinWorks just capped a total of US$15.7M funding
We plan to offer various range of financial products and we will present more products which make us going ‘super’ with various options.
With our current portfolio management, the new app enables users to monitor their assets and loan in the same app. We also ensure transparency with clear and detailed reporting for all activity in the apps.
What would be next for KoinWorks in terms of innovation?
Currently, we are combining retail and financial institutions on our platform. We’re evolving from P2P lending to a marketplace lending platform.
We want to present more for the users so we are working on more advanced technology, preparing more products, and designing the most in terms of appearance. We want to make sure that all of the users are satisfied and have a convenient experience.
We also will present a unified credit limit where the users are provided with a certain amount of credit limit, so the borrowers don’t have to re-apply their loans like they used to.
With more investment alternatives, we would like to be the platform that helps our users maximise their finances even better.
Any funding development or partnership that KoinWorks can disclose to us?
Aside from our past fundings that include Series A led by Mandiri Capital Indonesia, Gunung Sewu, and Convergence Ventures, Series A+ led by Quona Capital, Series B led by EV Growth & Quona Capital, and Series B2 led by Saison Capital, we have closed and in deeper talks with more local and international FI’s for collaborations.
We are also going deeper into our older partnerships and opening new industry partnerships.
Can you share with us what is your prediction of the future of the fintech industry in Indonesia and Southeast Asia?
The numbers of digital businesses are still growing rapidly. Over the past four years, the growth of e-commerce in Indonesia has increased by 500 per cent.
General Director of Informatics Applications at the Ministry of Communication and Information, Septriana Tangkary also stated that Indonesia is the 10th largest country of ‘e-commerce’ growth with a 78 per cent growth and is ranked first.
With the huge amount of Indonesian population (which is 268.2 million as per 2019), 49 per cent of the total numbers are still living in rural areas with the issue of financial access and lack of financial literacy.
Also Read: P2P lending platform KoinWorks raises US$16.5M in Series B funding round
That being said, fintech will grow to provide and could potentially be a part of the national economic infrastructure to tap those who have no access to financial services.
According to data, there is still 74 per cent of Indonesian SMEs that have yet to be served to financial access so the market is still wide open for the Indonesian fintech, especially fintech lending, to target potential SMEs. This, I believe, will affect the sustainability of the national economy where SMEs provide more than 90 per cent of the total national workforce.
With this many players running a similar fintech business, Indonesia will probably own a firm regulation for fintech. Various payment, funding, saving and investing options, basically multiple financial services will appear in more advanced technology.
As more Indonesians grow into the middle-income bracket and the population becomes more educated, they will be more financially savvy and would be willing to have a smarter way of managing their finances.
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Image Credit: KoinWorks
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