P2P Lending Industry Players Talk About Indonesia's Economic Growth Opportunities in 2023

Currently, Indonesia's economic growth is slowing. The global recession is predicted to approach Indonesia next year. What this situation means for the P2P industry lending and the impact on business actors in the country?

This #TuesdayStartup session discussed deeply about the beliefs of the P2P industry players lending and its role in economic growth. Read more, summary from point of view Yolanda Sunaryo as Deputy Chairman of the Multipurpose Cluster of the Indonesian Joint Funding Fintech Association (AFPI) as well as the CEO of RupiahFast and Bethany Jezamin as CEO Holding Hand.

Growth opportunities

AFPI is optimistic that Indonesia can get out of the recession next year. According to Yolanda, perhaps what will happen in Indonesia is not a recession, but a contraction. What is happening now has actually been felt when the initial pandemic occurred in 2020. At that time, TKB90 the number of P2P goes up, because borrowers experiencing financial difficulties.

However, the current or future situation can be a momentum for lenders or Actioncalendar to disburse loans. P2P Platforms lending facilitate loan disbursement by return up to 21%. These returns are impossible for conventional financial institutions to provide. How's that left? Actioncalendar must be selective in selecting sectors according to the risks they understand.

From the borrower's side or borrowers, many of them are actually not served by financial institutions. P2P can be an alternative option if their application is not processed by a financial institution, either for urgent needs or for business capital.

"We predict that loan disbursement in 2023 can increase by 25 percent. The pandemic will not discourage people from seeking various opportunities. Likewise, the opportunity for MSMEs is higher. We are optimistic that economic growth can reach 5 percent," he explained.

Meanwhile, Bethania (Jezzy) Jezamin assessed that the factors of the Ukraine-Russia war did have a major impact on a number of countries in the world, but were not too significant for Indonesia. He compared the global recession that occurred in 2008 at the same time.

One of them is because Indonesia is preparing for the 2009 General Election. In addition, Indonesia does not play too much in securities or financial instruments mortgage. What's interesting, he said, is that the political year will start in 2023. The driving machines belonging to political parties will begin to wage guerrillas.

Jezzi said any political interaction would require logistical support. In other words, this situation has the potential to become an indirect economic stimulus. He believes the opportunity for economic growth is still large next year. "I see [the situation] in 2023 will be the same as 2008 where Indonesia is not too affected," he said.

Mitigation steps

Yolanda mentioned a number of important points related to mitigation efforts in reducing the potential risk of bad loans next year. AFPI, which is an umbrella for industry players, continues to monitor lending activities.

One of them utilizes Fintech Data Center (FDC) or customer data centers to prevent excessive lending. "If there are prospective borrowers who apply for more than two or three, it will affect credit rating," he said.

From the business aspect, Yolanda advised P2P actors to be more selective in facilitating loan distribution. For example, P2P in the productive segment focuses on business sectors that are not affected by the recession or are less dependent on imported raw materials.

"In terms of funding distribution, we are not too worried as long as the level of risk mitigation is safe. The main thing is to secure the risks that will occur. Growth will still exist, but slow down. We also encourage people to be wiser in determining their needs and desires before borrowing. ," added Yolanda.

The role of P2P and collaboration

Citing AFPI data, Yolanda revealed that the need for loans/credits in Indonesia reached IDR 2.600 trillion. Meanwhile, conventional financial institutions, including banking, pawnshops, and financing, are only able to channel around Rp1.000 trillion. That means, it's still there gap 650 trillion.

Therefore, he assessed the presence of P2P lending have a big role in helping reduce gap the. "Many people whose loan applications cannot be processed by financial institutions because they do not meet the requirements, such as having a bank account. Likewise, nearly 50 million MSMEs do not have access to loans," said Yolanda.

On the other hand, Jezzi said that P2P as part of the financial sector is still relatively young in Indonesia. This sector only experienced growth in 2016. However, P2P had its first 'test' in 2020 when the pandemic hit. What will happen this year will be a kind of second test.

From the company's point of view, P2P players must be careful to take steps to survive in the midst of economic turmoil. But on the other hand, P2P players have moral obligations to take part in Indonesia's economic recovery.

"The main key is collaboration with relevant stakeholders. Economic recovery cannot be done alone. For GandengTangan, we focus on making Open APIs so that it is easier for anyone to partner with us, can be integrated immediately, quickly and transparently," he added.

As the OJK mandate demands the P2P sector to become a healthy financial industry player, Jezzi also mentions the importance of being self-sustaining company. mentality This needs to be built so that startups can focus on generating income, and not only relying on investor capital.

"Unless there is a plan to develop new innovations, of course it will cost a lot. This means that the focus on healthy companies is the main thing because OJK demands industry players to become healthy financial institutions," he concluded.