Indonesian P2P lenders set to disburse $17 billion in loans in 2022: Association

Jakarta. Indonesia’s peer-to-peer lending industry is expected to increase loan disbursements by 70% to $16.6 billion this year, driven by strong demand from the country’s underbanked micro, small and medium-sized businesses, executives said Thursday. Of the industry.

“This year [we] projects loan disbursement to exceed Rs 250 trillion [$16.6 billion] from last year 155 trillion rupees,” Kuuseryansyah, executive director of the Indonesian Fintech Joint Funding Association (AFPI), said at an event in Jakarta.

The association raised the 2022 projection by 225 trillion rupees after seeing the industry maintain its rapid growth this year.

Kuseryansyah said peer-to-peer lending increased by 25% in 2020, despite bank loans taken out that year. While bank lending grew by around 7% in 2021, fintech lending grew by 112%. He said that this year, bank lending is expected to grow by around 10% and fintech lending may see growth of over 50%.

He attributed the growth to strong demand from micro, small and medium-sized enterprises (MSMEs). According to the World Bank, there was a huge financing gap in the Indonesian MSME sector. Conventional banks and financial institutions provide only Rp 1 trillion of funding to the industry, only 38% of its Rp 2.6 trillion funding requirement.

“There is a Rs 1.65 trillion gap. That is what makes this industry flourish because the demand is high. Last year we only met about Rs. 155 trillion of demand, that’s less than 10 percent of the gap,” Kuseryansyah said. said.

Munawar Kasan, deputy director of fintech regulation, research and development at the Financial Services Authority (OJK), said the peer-to-peer lending industry’s ability to attract significant customer funding has also underpinned its growth. during the last years.

“There are 87.29 million user accounts [as of July 2022]. This means that tens of millions of people transact or borrow money for commercial or consumer activities. The industry continues to grow and its users are increasing,” Munawar said.

In June, the OJK issued new regulations for financial technology (fintech) companies to bolster the fledgling industry. Regulators are now requiring existing fintech companies to increase their paid-up capital up to RP 12.5 billion over the next three years. New ventures must have a paid up capital of at least Rs 12 billion.

OJK also capped the interest charged by the fintech and set limits in the agreement between the borrower, the lender and the fintech platform, including personal data protection and billing provisions.

Comments are closed.