Agent-based fee expertise firm Payfazz CEO Hendra Kwik mentioned the corporate’s technique to have offline brokers assess rural small companies on the bottom was the important thing to higher credit score scoring and stop dangerous mortgage dangers.
“One factor that we be taught from banks is that they’ve individuals on the sector to do offline verifications. Our offline brokers additionally assess SMEs [small and medium enterprises] so we are able to higher serve them with decrease threat,” Hendra mentioned throughout a web-based convention hosted by Tech in Asia on Thursday.
He added that Payfazz, which secured a US$58 million series-B fund in July, had but to make a revenue from its lending product. Nonetheless, the corporate’s core enterprise, specifically invoice funds and cash transfers, has been worthwhile.
Hendra additionally mentioned that peer-to-peer (P2P) lending was a great way to spice up monetary inclusion, however challenges stay as microbusinesses have been typically tough to deal with and lacked digital and monetary literacy, with most individuals by no means having used a fintech or monetary product.
In accordance with the 2019 e-Conomy SEA report produced by Google, Temasek and Bain & Firm, there are 93 million underbanked individuals in Indonesia and solely half of these with a checking account have entry to companies corresponding to lending and insurance coverage.
The nation has been pushing for higher monetary inclusion with specialists calling on fintech corporations to department out their companies past the island of Java.
The Indonesian Fintech Affiliation (Aftech) reported that by the top of the second quarter of this yr, it had 362 fintech start-ups members. Its latest survey confirmed solely 23 % of fintech corporations have a attain outdoors of probably the most populous island, whereas 41 % have operations in Higher Jakarta.
Greater than half of the respondents, nevertheless, mentioned that they had set their sights on the unbanked and rural inhabitants as a goal market.
“Regardless of many fintech apps, the issue of individuals onboard the platforms persist. This implies the launch of latest fintech merchandise doesn’t imply that everybody will probably be included,” Hendra mentioned, including that fintech agency shouldn’t solely deal with product innovation but additionally reaching out to rural shoppers.
“There’s a lengthy approach to go, however collaborations can foster extra inclusion.”
In the meantime, P2P lender Modalku cofounder and COO Iwan Setiawan mentioned that whereas the COVID-19 pandemic had led to a rise in dangerous loans, it had additionally boosted individuals’s urge for food for lending.
The corporate’s non-performing mortgage (NPL) price stood at round 2 % amid the well being disaster, comparatively higher than the trade common of seven.9 % as reported by the Indonesian Fintech Lenders Affiliation (AFPI) in September.
“SMEs and retail loans are impacted, whereas micro-businesses are the toughest hit by the pandemic,” he mentioned on the convention. “However we additionally see 20 occasions extra site visitors on our platform.”
Current Monetary Authority (OJK) information reveals that P2P lenders disbursed loans totaling Rp 121.87 trillion (US$eight.29 billion) as of August, greater than double the Rp 54.72 trillion issued over the corresponding interval final yr.