Edfintech is changing Indonesia’s unaffordable education system

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Growing up in Singapore, I’d never even thought of education as a privilege. Moving from kindergarten all the way through to tertiary education seemed a natural progression, as if it had all been laid out for – heck, forced onto – me. I’m one of the lucky ones, though. In Indonesia, access to education is an unaffordable luxury to most families, which explains why enrollment rates starkly drop as students move from secondary to tertiary schooling.

Today we look at:

• How edfintech is giving Indonesian students a chance at higher education
• A Singapore-based digital payroll platform’s fresh funds
• Other newsy highlights such as SoftBank eyeing its first SPAC, and Indian unicorn Pine Labs’ US$2 billion valuation

PREMIUM SUMMARY

The transformative power of edfintech

In Indonesia, tertiary education is unaffordable to the average citizen. It costs US$1,000 to US$5,000 a year, whereas the average Indonesian family earns only US$2,700 a year. This, coupled with the dearth of financial aid schemes and student loans, could be why enrollment rates drastically dip across education levels: from a 97.2% enrollment rate for primary education to just 31% at the tertiary level. That’s where edfintech startups could fill in the gaps.

• What’s up, edfintech?: Education-focused fintech startups are rising in Indonesia, with key players including Cicil, Danacita, Danadidk, and Pintek. Their purpose is to connect lenders (funders) with borrowers (parents and students), as well as partner up with academic institutions to offer loans to students, which can be repaid in monthly instalments over a two- to three-year period.
• Weeding out fraud: To lower the risk of fraud, fees are paid directly to schools, in turn giving funders more confidence to lend. And the fraud identification process is far speedier than before: Where banks would have sent surveyors to homes to manually verify information, Indonesian startup Cicil is able to use an applicant’s GPS data to verify their claims on where they live and study.

Read more: Why ‘edfintech’ is ripe to thrive in Indonesia

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