BRI Agro Changes Name to Bank Raya, Targets 7 Million "Gig Economy" Customers

PT Bank Rakyat Indonesia Agroniaga Tbk (BRI Agro) officially changed its name to PT Bank Raya Indonesia Tbk (Bank Raya) which was approved through the Extraordinary General Meeting of Shareholders (EGMS) on Monday (27/9). As a transformation step become a digital bank, Bank Raya will target the informal worker market or gig economy of 2022.

Contacted separately DailySocial.id, President Director Kaspar Situmorang said that Bank Raya will focus on serving the market segment that is accustomed to using smartphone and digital banking services to maximize its revenue (underbanked). Meanwhile, BRI will focus on serving ultra micro customers (unbanked).

"We are targeting 10% customers or around 6-7 million workers out of the total projected 74 million workers gig in the next five years. Some examples of workers gig economy that we are after, for example banking agents (smart behavior), e-commerce merchants, logistics, and F&B merchants," said Kaspar.

Currently, Bank Raya's digital transformation process is underway, both on new business models and business reforms Existing. This transformation will focus on three main pillars, namely (1) developing digital products lending and saving by end-to-end, (2) digitally digital business development online-to-offlinee(O2O), and (3) do revamp by managing business existing, optimizing the efficiency of business processes, as well as strengthening human resource development.

"Our product development will use a customer experience B2B2C based. For digital savings and digital lending, we make products that can be used on partner platforms easily and safely. We hope to penetrate the market with the lowest cost of customer acquisition and customer lifetime value the highest through this B2B2C-based product," said Kaspar in a short message.

In addition to approving the change of new identity, BRI Agro plans to issue 2.150.000.000 shares with a value of Rp 100 per share through the PMHMETD scheme or 9,96% of the issued and fully paid capital. These funds will be used to strengthen the financial foundation for developing new business models, building digital financial infrastructure for the sector gig economy, and accelerate the ongoing transformation process.

Due to the focus on reorganizing its business portfolio towards digital, BRI Agro estimates that its financial performance will experience a slowdown. The company has prepared a number of strategies to anticipate this until the end of 2021. It targets this transition to digital to be completed in 2022.

Based on the 2020 Annual Report, BRI Agro was originally established to focus on serving the agribusiness sector in Indonesia. 50%-70% of BRI Agro's loan portfolio is channeled to the on farm nor off farm. However, as digital attacker from the parent company BRI Group, the company began to carry out digital transformation by entering the consumer, retail and ultra-micro segments.

BRI Agro launched Quiet Borrow platform (PINANG) which is the first application-based loan in Indonesia owned by a bank. The PINANG application offers a digital registration and verification process, digital scoring, and digital signatures. In 2020, PINANG has disbursed loans of IDR 70,6 billion to 18.069 debtors.

In addition, BRI Agro also cooperates with the P2P Modal Rakyat platform to channel loans to the ultra-micro segment. This synergy has been agreed through the signing of the MoU in December 2020.

Happen gig economy

BRI Agro has added another line of banks that have transformed into digital banks through rebranding. If several new digital banks are eyeing the segment digitally savvy and millennials, BRI Agro took a different strategy by entering the segment gig economy.

Sector gig economy generally synonymous with workers or short-term contract employees or freelancers (freelancer). Perpetrator gig economy They are also often associated with having a flexible working environment and working hours so that they have the potential to be exploited.

Based on BRI Agro's internal data, workers gig economy projected to reach 74,81 million in 2025 taking into account developments shifting digital. According to him, the number of workers gig economy in Indonesia continues to grow every year, mainly triggered by the impact of the Covid-19 pandemic, which is 27,07% (YoY). Meanwhile, the number of employees full time down 8,84% (YoY).

In the context of workers gig Indonesia, World Banksaid that digital gig workers are now a big stepping stone in the workforce for young people. This is a big opportunity for digital players, but with a note for certain sectors, both in terms of geography and type of work.