“Increase in mobile and internet penetration along with the adoption of digital technology and improvement in credit-assessment related technology has driven the increase in borrower base and an increase in loan disbursement.”
Analysts at Ken Research in their latest publication “Competition Benchmarking: Indonesia Peer-to-Peer Lending Market Outlook to 2024” believe growth in e-commerce activity driving seller activity, adoption, and integration of digital technology with e-commerce, entry of new platform operators and their ability to cover a wider geography, improvement in the internet and mobile phone penetration and increased participation of banks and financial institutions are some of the factors that will drive the market to register a near 50% CAGR in terms of loan disbursement for the period 2019-2024.
Growth within Java: Loans disbursed in Java have dominated the Indonesia Peer-to-Peer lending market. Share and growth in loans disbursed in the Java region have increased for the period 2016-2018. Java accounts for a majority of the economic activity in Indonesia. Other factors such as, population, literacy rates, and a number of lenders and borrowers and the presence of banking system and increase in mobile phone and internet penetration helped accelerate the growth in loans.
Funding MSME: SMEs in Indonesia face a USD 75 Billion funding gap. Banks’ reluctance to fund these businesses on account of the risk they have given rise to the development of the Peer-to-Peer lending industry The use of unconventional data to assess borrower risk has given rise to a new form of credit assessment as opposed banks’ traditional system. Investors have been drawn to these platforms for their attractive returns and low commission charges.
With mobile phone penetration, the industry is expected to scale to ~IDR 430 trillion in terms of loans disbursed by 2023. The problem of financial inclusion still persisted due to lack of financial literacy. This was tackled by means of collaborating with different partners like banks, e-commerce and payment platforms to reach a wider audience.
Supportive Regulatory Environment: The Indonesia regulatory authority, OJK, has promptly introduced regulations, learning from the mistakes of the Chinese authorities. OJK has introduced two regulations since 2016 to combat the problem of illegal and unreliable P2P platforms. The process of registration is a two-stage process. The first stage is a registration with intent to operation. The second stage is licensing, where a company has to prove operational reliability with respect to platform risk mitigation, customer data safety, and fraud detection and prevention. In addition to the second regulation, the authority has set up a Sandox system where registered platforms can go through an operational reliability test to find weaknesses.
Key Segments Covered:-
By Location of Loan Disbursed
Key Target Audience
Existing Peer-to-Peer Lending Platforms
New Market Entrants- Domestic Platforms
New Market Entrants- International Platforms
Banks and Financial Institutions
Investors & Venture Capital Firms
Third-Party Technology Providers
MSMEs and E-commerce Sellers
Time Period Captured in the Report:-
Historical Period: 2016 -2018
Forecast Period: 2019-2024
Government Bodies P2P Market Indonesia
Third Party Technology Providers in P2P Market
Indonesia MSMEs and E-commerce Sellers P2P Market
Indonesia Long Term Lending Market
Indonesia P2P Lending Market
Peer to Peer Lending Industry Indonesia
Indonesia P2P Lending Commission Margin Size
Number of Borrowers Registered Indonesia P2P Market
Indonesia Peer to Peer Lending Market Partners
Peer to Peer Lending Market in Indonesia
Indonesia P2P Lending Industry
Number of Lenders Registered Indonesia P2P Market
Interest Rate Indonesia P2P Lending Market
Indonesia Long Term Interest Rate
Indonesia Peer to Peer Lending Market Platforms
Indonesia Peer to Peer Lending Regulations
Indonesia SME Financing Market
Peer to Peer Lending Market Indonesia
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Ankur Gupta, Head Marketing & Communications