JULO is optimistic that the education financing segment has space in Indonesia

Fintech lending startup JULO believes that the potential for financing in the education segment still has large room for growth in Indonesia. Through the launch of Education Fees, JULO hopes to help ease the burden on the community with small installments and friendly interest.

In a short interview with DailySocial.id, Chief Business Officer of JULO Group Nimish Dwivedi explained, the company's background is interested in this segment because it is in line with the vision of wanting to improve the quality of life and make Indonesian people more empowered, through equitable financial facilities.

"JULO believes that education is an essential need of the community to improve the quality of life of the community in a long term. It would be a shame if education is hindered by financial constraints, then JULO digital credit through the Education Fee feature wants to facilitate education financing in an installment system with friendly interest," he said.

JULO Co-founder and CEO Adrianus Hitijahubessy said, this year will be a year full of breakthrough innovations for JULO Digital Credit. According to him, in addition to innovation in terms of campaigns and features, his party will cooperate more with various strategic partners in the near future - as has been done together Grab.

"In this way, more and more levels of society can be reached by access to credit and become more financially empowered for a better quality of life," he said.

For the record, Indonesia is the 4th largest education system in the world - after China, India and the United States, with 50 million students in more than 250 thousand schools. This vast potential cannot be separated from various problems, one of which is the phenomenon of dropping out of school.

Quoting data from the Central Statistics Agency, it was noted that as many as 67% of students dropped out of school due to economic constraints. With 86% of the number of open unemployed people dominated by educational levels equivalent to and below high school, this obstacle is certainly the main obstacle for Indonesian people to improve their quality of life and become financially empowered.

JULO is not the first lending player to enter this segment. Previously there were Pintek, Danacita, CICIL, Danadidik, Edufund, and KoinPintar from Koinworks, with various financing schemes for the education industry.

KoinPintar and Pintek have left this business. Koinworks reasons for closure as of April 2023 This was done because the company decided to switch to a financing business with higher attractiveness.

As for Pintek, until now there is no official statement yet which was delivered. Rumors are circulating that Shipper is exploring financing products for logistics with Pintek. Now on the Pintek website, the company offers two financing products, namely supply chain financing (distributors, suppliers and merchants), and business funding (PO, invoices and inventory).

In other words, the products offered by Pintek are more or less the same as those offered by most lending players who focus on productive financing, such as Investree, Modalku, and KoinWorks.

Nevertheless, Dwivedi still sees that with the right approach and risk measurement, the solutions offered by the company will remain attractive to the public. He explained that the financing scheme for this product is connected to JULO Kredit Digital. Where, JULO Kredit Digital provides credit limits for users who have met the qualifications and big data verification through advanced analytics in terms of credit scoring, anti-fraud and affordability.

"Like digital credit card products, JULO also performs credit scoring not only during the registration process, but continuously based on the user's credit history on the fintech platform."

Cost of education

He explained that the Education Fee feature is one of the features of JULO Kredit Digital, so it follows the financing scheme of other JULO Kredit Digital features. Users with active limits can follow the following flow:

Select the Tuition Fee product in the JULO application > Enter details of the student and the intended educational institution > Enter the payment amount > Select the available tenor > Approve the transaction.

"JULO Digital Credit provides interest starting from 0,1% with a tenor of up to nine months."

For the record, JULO Kredit Digital was inaugurated since September 2021 to expand the functional loan ceiling so that users can use it for various types of transactions, starting from transactions on e-commerce sites, paying bills, top up e-wallet balances, cash loans, transferring funds to their own or other people's accounts, and transactions via QRIS.

Education Fees, he continued, can be used to pay for all educational fees at any school, any college, any university and any online course in Indonesia. This coverage extends to more than 250.000 institutions with plans to add more in the future.

"We remain focused on using digital credit to empower our customers and become an integral part of their daily lives. Consumers have started using JULO's educational features for payments covering primary, secondary and university education fees in first-tier cities and secondly throughout Indonesia," added Dwivedi.

Regarding the company's performance, the accumulated financing that JULO has distributed since its founding has reached IDR 9,87 trillion. Meanwhile, this year's loans alone amounted to IDR 1,64 trillion with an outstanding of IDR 1,06 trillion. Meanwhile, the total number of borrowers reached 1,4 million people, with 1,04 million of them being active borrowers.

These borrowers are dominated by the active working age group with an age range of 21 years-40 years. They are spread across urban cities (70%) and the rest in rural areas (30%). It is stated that 70% of the purpose of this loan is used to improve the quality of life, including business capital, education costs, health costs and home renovations.