Benedicto Haryono: "Super Financial Apps" is KoinWorks' Effort to Expand Market Segments

Founded in 2015 as a platform p2p loans, KoinWorks has now transformed into what they call "super financial apps". It also accommodates various needs, ranging from gold investment, mutual funds, bonds, salary financing, to... payroll financing. To delve deeper into their long-term vision, DailySocial had the opportunity to interview the Founder & CEO of KoinWorks Benedicto Haryono.

Starting the conversation Benedicto narrates, development super financial apps is an effort by KoinWorks to carry out its vision. He wants the financial services he brings can reach a wider audience, in various industry segments. As is known, currently one of the largest market shares is captured through features lendingit is MSME.

“We want to expand reach us, back when we started niche we go to E-commerce just. But it's an industry E-commerce yes, only one industry, the percentage of GDP is still not up to 10%. What we hold on to is our vision, wanting to be able to embrace everyone," he said.

Benedicto added, on the other hand, they want to provide wider options to funders to achieve their financial goals - in this case related to diversification of investment instruments. Funding approval rate in CoinWorks it is still around 10% of the total incoming traffic, meaning that there is very high interest from the public and it has not been fully accommodated.

So far, the percentage for retail funding (from the public) still dominates, namely around 80%. While the rest comes from Actioncalendar institutions, both from local financial institutions such as BTN, CIMB Niaga, and BRI Agro; or outside financial institutions such as Lendable and Triodos Bank.

Market competition

As of January 22 2021, OJK has covered 148 players , whether the status is still registered and/or already licensed. Responding to existing market conditions, Benedicto believes that players still have quite a lot of room for movement. "If we compare banking books 1 to 4, the number of players is more than that p2p loans, not including BPR. But hundreds of existing banks have not yet fully implementedaddress all the needs of MSMEs or the general public. By Opportunity, I don't think so overcrowded," he said.

He also touched on the business model p2p loans. Most players are VC-backed business, although some are fully supported by corporations, such as platforms made by Mayapada or Sinarmas. The large number of businesses supported by venture capitalists will lead to the possibility of consolidation, especially if they have entered the final stage (in terms of funding). This is because the number of investors who can participate in this round is still limited.

"In the past, banking operated without any existence backing-year venture capital, the way they grow their business and assets is different. But if you look at the businesses that are being helped venture capital, over time there was consolidation. Possibilities in the industry p2p loans there will also be consolidation, due to liquidity venture community in Indonesia it's not as much or as varied as in the US or China, so number of investorsIt's all the same, especially when you enter later stages (series C and above)," he added.

He continued, "Players supported by conglomerates will not compete with us, they will not compete for funding, because I have stable source of funding. And they have niche markets that other players haven't done, either geographically or in different industries."

Regulations are also seen to have directed the ecosystem to be able to build a solid business. For example tightening carried out by OJK by increasing capital requirementsto produce a better and healthier business. "I see these new regulations (which are being prepared and socialized) as OJK's efforts to make business safer, more protected. But of course as startup founders, we don't really like it when regulations are too fast. I think this step was taken more to safeguard the industry."

Impact of the pandemic

Like most other businesses in Indonesia, Covid-19 has also shaken KoinWorks' business. One of the most significant, companies must rework their plans. This is due to changing consumer habits, which inevitably forces businesses to adapt business models. Because many of the MSMEs they serve were also directly affected - some of them had to go out of business, but quite a few were also able to take advantage of the momentum and rise.

"KoinWorks was quite under pressure at the start of the pandemic to manage risks and carry out restructuring customer requiring. In Q2 2020 we were busy with that. But around Q3-Q4 the business started to grow again, until finally in December it was back to the same level before Covid. By profitability even healthier operational cash flow more positive," said Benedicto.

2021 plan

To be super financial apps Of course, it requires a lot of effort to be able to present various product lines and services. Looking at existing trends, digital companies whose strategy is the same is to consolidate – instead of developing each service from scratch. But KoinWorks has a different view, until now there are no plans to acquire other players. According to Benedicto, because currently the market is still very wide open and game plans the company is still quite clear.

KoinWorks will also continue to focus on the Indonesian market. This year, many new services will be launched to cover a wider market segment. KoinGaji will also be one of the features that will be boosted this year, after 4 months of implementation pilot project at the end of last year, the company found quite impressive traction.

"We are quite confident in the KoinGaji service, this year the marketing will be quite aggressive so that it can serve a wider market share. We believe this service is quite unique, because it is not only payroll financing but also provide additional services to human resources company," explained Benedicto.

KoinGaji's optimization will be focused on the first half of this year, while the company will strengthen its profit strategy. The target is that in the second quarter of 2021, the company will record a profit with organic growth. Furthermore, in the second half, they will focus on new products that will be launched. "This year there will be a lot to do cash flow improvement to build a healthy C series foundation with profitability plan clear, growth better, controlled risks, and post-series game plan C is more measurable," he added.

The new platform that will be launched this year is aimed at MSMEs. This tool is considered to be able to make business easier to do, not only loan products but also features for managing finances and risk management.

"With all unicorn starting to go in fintech, then we must be able to build niche and our specialty, can we complement what they build [...] Because if they build it fintech definitely to captive market Formerly. "From this foundation, KoinWorks will build unique features that are not easily replicated," he concluded.