Indonesian fintech attracts substantial funding, especially from Malaysia

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JAKARTA, Nov 11 (Bernama): As Indonesian fintech grows rapidly based on innovation and technology, the ecosystem benefits from a large portion of foreign investment, including from Malaysia, amid the Covid-19 pandemic.

“We predicted that the same funding trend would continue next year,” Indonesian Fintech Association (AFTECH) deputy general secretary Dickie Widjaja told Bernama, adding that fintech had resisted.

He said 30 fintech companies received total capital of US $ 648 million in the first half of this year, and nearly half of the companies were raising funds before the pandemic.

According to the annual survey of AFTECH members 2019-2020, around 55% of investments in FinTech came from Indonesia, followed by Singapore (18%), China (8%) and Japan ( 7%), while Malaysia contributed 2% of Indonesia. fintech investment.

The industry continues to grow with the increasing adoption of information technology with a transaction value of 19.2 trillion rupees or 5.63 billion RM throughout 2021.

The number of digital wallet or e-money users has reached over 500 million, almost double the total population.

Dickie said the number of fintech startups registered as AFTECH members increased from 24 to 275 at the end of 2019 and reached 335 at the end of the fourth quarter of 2021.

“The growing number of registered and licensed fintech operators, the variety of financial services solutions offered and their adoption in the market show it,” he said.

He said the FinTech industry continues to grow and develop thanks to the country’s large mobile market and active internet users.

The solutions available in the market also varied, ranging from digital payments and fintech loans initially only to aggregators, credit scoring, financial planners, crowdfunding and project finance.

Major fintechs disrupting financial services in Indonesia, according to a report, are online brokerage Ajaib, payment solution Cashlez, e-money wallet GoPay, financial solution Koinworks and Payfazz.

On fintech and regulation, Dickie said the two increasingly go hand in hand with technological developments, as regulators need to see how innovation shapes the financial sector.

He said that most of the time, the government has provided support and space for businesses to innovate, for example by giving a sandbox regulatory framework.

Therefore, he said, companies must face it with innovations that continue to prioritize good governance, risk management and consumer protection.

“We hope that the community can use the fintech services with a positive spirit and in good faith,” he said.

He said AFTECH regularly engages with government to complement the authority’s ability to issue policies and regulations that support innovation and breakthroughs driven by fintech companies.

This form of support, including various perspectives on the potential and challenges that would be discussed at the 2021 Indonesia Fintech Summit (IFS), Dickie said.

The two-day summit, which begins today in Bali, is also the culmination and closing event of National FinTech Month.

“Key figures from the region’s government, fintech companies and banking industry will attend IFS. We also invite the public to participate virtually via the platform www.fintechsummit.co.id ”, he added.

The summit is part of Road to G20 Indonesia 2022 and will host the country’s presidency of the G20. -Bernama


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