The Fintech Industry Is Developing Fast, Airlangga: Must Help Reduce Unemployment

Coordinating Minister for Economic Affairs, Airlangga Hartarto. (Photo: Twitter @airlangga_hrt)

JAKARTA - The government sees that the role of the digital economy in Indonesia is getting bigger along with the rapid development of the financial technology (fintech) industry in the country. Even in 2019, the contribution reached 40 billion US dollars.

Coordinating Minister for the Economy Airlangga Hartarto said, based on research from Google, Temasek and Bain & Company in 2025, the role of fintech in Indonesia is estimated to reach more than 100 billion US dollars.

Furthermore, Airlangga hopes that fintech can answer the challenges that are currently happening in Indonesia. One of them is answering the challenge of unemployment amid the COVID-19 pandemic.

"Fintech is currently expected to be able to answer the potential challenge of open unemployment so of course fintech can encourage MSME or entrepreneurial activities. The government itself has enacted Law Number 11 of 2020 regarding Job Creation. Of course it is hoped that this can transform the economy nationally," he said at the Indonesia Fintech event. Summit 2020, Wednesday, November 11.

Airlangga said fintech was the most competitive sector. Currently, there are 4 unicorns built and based in Indonesia. Also, 1 decacorn which is worth more than 10 billion US dollars.

In the future, said Airlangga, fintech will continue to play an important role in the Indonesian economy. This can be seen from President Joko Widodo's financial inclusion target in 2024 of 90 percent. Meanwhile, currently Indonesia is still in the position of 76 percent.

"The potential of this fintech with a number of challenges, namely financial literacy, digital literacy, is supported by a cross-sectoral ecosystem to maximize government programs and initiatives," he explained.

According to Airlangga, fintech together with the industrial revolution 4.0, e-commerce or on demand service, has become an icon or showcase for Indonesia's digital economy. Not only focusing on payments (payments) and loans (lending), fintech is also working on capital rising, digital insurance and market proposition.

"We also appreciate the success of fintech development with the OJK introducing a regulatory sandbox. Which still allows innovation to continue, but the government still provides space. OJK also supervises the development of its business model," he said.