Forbes Indonesia|May 2020
Micro, small and medium enterprises (MSMEs) have become an influential backer for the Indonesian economy. The Finance Ministry notes that the MSMEs contributed 60.3% to the total gross domestic product in 2019. Besides, it also absorbs 97% of the entire workforce and 99% of the whole job opportunity. Currently, there are more than 64 million MSMEs in the country, and 63.3 million are micro-enterprises.
As the majority of people in Indonesia are unbanked, most MSMEs are lacking in financial access. In its study, Indonesia’s Fintech Lending: Driving Economic Growth Through Financial Inclusion, consultancy firm PwC Indonesia finds that 74% of total MSMEs don’t have access to credit. Hence, creating an opportunity for fintech lending to tap this market. Tapping this opportunity, Koinworks (PT Lunaria Annua Teknologi) chooses to offer financing schemes to the MSMEs players, specifically those who sell their products on e-commerce. This brings advantage to the company in the midst of the COVID-19 pandemic since MSMEs who are able to operate online should still manage their business better than the conventional ones.
“From the beginning, we focused on the online sellers [as our target market], which made us a P2P lending platform with the biggest online merchant portfolio. The impact from COVID-19 to these online sellers are not that big compared to the conventional offline retailers,” says Benedicto Haryono, the cofounder and CEO of Koinworks.
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