Jokowi Admits Online Loans Can Make A Positive Contribution To The Indonesian Economy

President of the Republic of Indonesia, Joko Widodo. (Photo: Presidential Secretariat)

JAKARTA - President Joko Widodo (Jokowi) acknowledged that the financial technology (fintech) industry has made many positive contributions to the national economy. This is reflected in the increasing access to finance provided to the public.

Jokowi said that as of September 2020 the online loan industry (pinjol) had distributed loans of IDR 128.7 trillion. In fact, that figure is up 113 percent compared to the same period last year.

In his notes, Jokowi said that up to September there were 89 fintech organizers who contributed IDR9.87 trillion to Indonesian financial service transactions. Meanwhile, Rp15.5 trillion was disbursed by fintech operators and licensed equity crowdfunding.

"I know that fintech services have grown very rapidly. This is a tremendous development," he said, at the Indonesia Fintech Summit 2020, Wednesday, November 11.

Even so, the former governor of DKI Jakarta realizes that Indonesia still has a big homework to do in developing financial technology. Given the financial inclusion index in Indonesia is still behind compared to several other countries in ASEAN.

Where in 2019 financial inclusion in Indonesia was only 76 percent, lower than several other countries in Asia. Meanwhile Singapore 98 percent, Malaysia 85 percent, and Thailand 82 percent.

"The level of our digital financial literacy is still low. Only 35.5 percent. There are still many people using informal financial services. Only 31.26 percent of people have used digital services," he explained.

Jokowi requested that fintech companies not only act as lenders and online payments. But it must also be the main driver of digital financial literacy for the community.

Furthermore, he also wants fintech to function as a companion to financial planners, and expand access to micro, small and medium enterprises (MSMEs) in e-commerce marketing.

"Fintech innovators must also develop themselves continuously to carry out the function of aggregator and innovative credit scoring, providing equity crowdfunding and project financing services," he said.