80 Mln Indonesia’s Cell Phone Users Become Opportunities for Fintech Industry
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Minister of Communications and Informatics Rudiantara says financial technology, or fintech will be used as an effort to expand access of financial services to public, or financial inclusion. This relates to the use of mobile technology amid Indonesia society.
Rudiantara revealed in Indonesia there are 170 million people own mobile phones and 130 million people access the internet. Of the figure, as many as 100 million people access the internet via mobile phones. However, a number of people in Indonesia who have a bank account, based on data from Bank Indonesia, only reach 90 million.
“This means there are 80 million people have cell phones but are not given access of application related to finance and banking. Incredible,” said Rudiantara as quoted from the official page of Communications Ministry, Saturday (3/4/2017).
Based on the fact, Rudiantara said, the banking sector in Indonesia now needs to formulate new technology-based business model.
He said this in ‘Cooperation of National Movement of 1000 Digital Startups’ event initiated by PT Bank Bukopin Tbk (BBKP) at the Ministry of Communications, Jakarta, last week.
“For Indonesian banking it is only a matter of time to think of new business model, especially for consumer banking. Bank management must think to integrate itself to the new banking technology wave, that is, financial technology (fintech),” he explained.
The application of technology in the banking aspects is very diverse. Therefore, the Minister of Communication and Informatics expects the banking world to understand the characteristics of consumer.
“This indicates that SMEs that borrow can count, although getting larger interests but there is assurance to be able to get a loan more quickly to develop business,”
“Fintech is diverse, but that much developing is virtual lending which relates to consumer banking. Why, people prefer to use fintech to borrow money rather than go to the bank? The reason is that in terms of time, because the process is fast,” Rudiantara explained.
He said that currently there are more or less 140 facilities of fintech services that have been registered. Indeed, the cost or interest is higher than that of traditional banking. But it is much better than moneylenders.
“This indicates that SMEs that borrow can count, although getting larger interests but there is assurance to be able to get a loan more quickly to develop business,” he explained.
He also expressed his appreciation for bank role, especially Bank Bukopin Tbk, which helped develop the startups and joint fintech.
“Because there remain few banks that want to get involved. This is a national program, not a program of Communications and Informatics Ministry. In 2020 we expect to reach 1000 qualified startups that go through a phase that has been determined,” he concluded.
Questions & Answers
Q.What is the primary goal of using financial technology in Indonesia?
What is the primary goal of using financial technology in Indonesia?
Fintech will be used to expand access to financial services for the public, which is also known as financial inclusion, using mobile technology.
Q.How many Indonesian mobile phone users currently lack a bank account?
How many Indonesian mobile phone users currently lack a bank account?
There are 80 million people in Indonesia who own cell phones but do not have a bank account, according to the Minister of Communications and Informatics.
Q.Why do people prefer using fintech for borrowing money over traditional banks?
Why do people prefer using fintech for borrowing money over traditional banks?
People prefer fintech for borrowing money because the process is fast, making it quicker to obtain loans compared to traditional banking.
Q.Which type of fintech is currently experiencing significant development?
Which type of fintech is currently experiencing significant development?
Virtual lending is the fintech type experiencing significant development, particularly as it relates to consumer banking.
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