Indonesia, which has one of Southeast Asia’s largest economies and is also number one in the world, has a rapidly growing financial technology center.
It is estimated that over the next five years, virtual currency revenues in Indonesia will reach $8.6 billion, meaning they will accumulate at a compound annual expansion rate (CAGR) of 34%, according to a recent report by Switzerland Global Enterprise. , an export. and promotion agency.
Indonesia is home to approximately 20% of all financial technology companies operating in the ASEAN region. Online loans and invoices dominate the country’s fintech sector, and account for approximately 60% and 20% of the industry’s businesses, respectively.
Indonesia’s virtual portfolio sector is governed by the country’s leading generation and telecommunications corporations. Local industry participants also partnered with foreign corporations interested in building operations in the country.
As noted, GOPAY is a leading provider of virtual wallets for GoJek, a multi-service platform that has been awarded the prestige Unicorn (worth $1 billion or more). Meanwhile, OVO is also very popular as a local virtual wallet service. It was introduced through the Indonesian conglomerate Lippo Group. GOPAY and OVO now account for more than 55% of all virtual invoices made in the country.
As first reported through Fintech News, transactions in virtual or electronic currency increased approximately 12 times to $9.8 billion, according to the Report through Switzerland Global Enterprise. The domestic virtual trading market is now expected to succeed at approximately $27 billion this year and exceed $50 billion by 2024.
Indonesia’s financing sector of choice has also grown in recent years. The Indonesian Financial Services Authority (OJK) reports that more than 1,000 peer-to-peer lending platforms (P2Ps) are active in the country through 2019. But around 160 can be valid service providers, as the sector has been targeted by many scammers. . Only about 25 P2P lenders were authorized last year, the OJK confirmed.
P2P loan volumes increased from $173 million in total loans in December 2017 to $6.4 billion in February 2020, representing an expansion of more than 37x, according to the report.
Fintech News Singapore estimates that there are around 240 new fintech companies in Indonesia. In addition to virtual invoices and P2P loans, the country’s other fast-growing fintech segments come with non-public finance, Insurtech and blockchain or distributed accounting (DLT) technology.
Fintech sector participants in Indonesia recently revealed that millennials save only 10% of their source of income due to low monetary literacy.
The Vice President of Indonesia says that virtual generation and online invoices have “absolutely necessary” because of COVID-19.
The country is also home to several Sharia-compliant Islamic fintechs. UOB Indonesia recently introduced TMRW, its virtual bank, while OVO now claims to be the country’s largest fintech ecosystem.
The Bank of Indonesia’s BRI recently demonstrated that it continues to aim to operate Open Banking to optimize the operations of MSME COVID-19.