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According to OJK, Indonesia accounts for 40% of ASEAN's digital transaction value.
ECONOMY Indonesia

According to OJK, Indonesia accounts for 40% of ASEAN's digital transaction value.

According to the Financial Services Authority (OJK), Indonesia accounts for approximately 40%, or US$77 billion, of the total digital economic transaction value in Southeast Asia, according to the e-Conomy South East Asia Report of 2022.

"The value of digital economic transactions has increased by 22 percent compared to the previous year," Ogi Prastomiyono, OJK's chief executive for insurance, underwriting, and pension fund supervision, said on Thursday in Nusa Dua, Bali.

This achievement has elevated Indonesia to the forefront of the ASEAN region's digital economy, he says.

The number of financial technology companies (fintech) capable of creating efficiencies and more accessible financial services has been one of the factors supporting the growth of the digital economy in Indonesia, according to Prastomiyono.

According to the OJK, there were 102 fintech companies connecting borrowers and lenders or offering peer-to-peer lending (P2P) in January 2023.

According to the official, P2P lenders make the loan process easier, especially for debtors who have limited access to traditional banking services.

"Loan disbursement can be done faster and easier with information and technology innovation," he said.

Furthermore, in January 2023, the OJK registered 97 digital financial innovations, which were classified into 15 business models, including innovative credit assessment (ICS).

According to Prastomiyono, ICS is a value added component in the credit disbursement process that allows loans to be disbursed quickly under simple conditions and includes the "buy now pay later" (BNPL) scheme.

OJK encourages a mix of credit ratings from traditional agencies and ICS because it ensures better credit quality while broadening the scope of financing realization, especially for those without banking access.

He stated that so far, conventional credit institutions have been evaluated using loan payment indicators and unpaid debt history.

Meanwhile, ICS employs big data covering up to 15 variables, ranging from social media activity to online transactions (e-commerce), he added.

He stated that the ICS has been a game changer for micro, small, and medium-sized enterprise (MSME) owners who need credit but don't have strong access to banks.

"We believe that Indonesia's economy will grow well in 2023 under normal growth conditions. It will increase by 5.31 percent in 2022. Despite the global crisis, inflation, higher interest rates, and geopolitical concerns this year, Indonesia's economy has remained stable "He went on to say.



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