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Johanes Hutabarat · · 5 min readIndonesian digibanks encroach on P2P lending by going direct
After years of working as an employee for several companies, Desy Komalawati, a 29-year-old in Bekasi, West Java, wanted to run her own laundromat. Her first step: get the initial capital to launch the venture.
Though a traditional bank had also approved her loan application, she knew from experience that the process takes a long time.
Photo credit: Bank Jago
With Indonesia’s digital banks starting to extend lending directly to customers, Komalawati says she is also considering borrowing from one of these players.
Typically, digital banks distribute credit through partnerships with fintech platforms, but they’re now reaching users directly in a bid to diversify their credit portfolios.
Signing up via a digital banking app is relatively easy, and applicants need only to verify with their identification card, though requirements differ by platform.
“If the offer or the scheme, the interest, and the process are quite easy, why not?” Komalawati tells Tech in Asia.
Like Komalawati, many aspiring entrepreneurs in the country are becoming the targets of digital banks who seek to expand their services.
While these moves offer new opportunities for entrepreneurs like Komalawati to access credit, digital banks may also end up eating into the business of their fintech partners.
In February, digibank Bank Jago announced a plan to push into direct lending, citing demand from existing customers. The bank said it would introduce the credit service this year.
Bank Jago’s head of sustainability and digital lending, Andy Djiwandono / Photo credit: Bank Jago
Its head of sustainability and digital lending, Andy Djiwandono, said in August that the company is conducting a trial on a limited scale, offering direct loans to existing users in scenarios that its partners “cannot fulfill.”
Several other digital banks in the country have also taken similar steps to develop direct lending businesses. These include BCA Digital or Blu, Bank Saqu, and Grab’s Superbank.
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In February, Bank Jago announced it would offer direct lending to customers. Other digital banks are following suit.
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