An association of 156 financial technology (fintech) lenders, Asosiasi Fintech Pendanaan Bersama Indonesia (AFPI), is offering to work with the Indonesian government to distribute funds intended to offset the economic impacts of the COVID-19 pandemic. As of September 2020, the government has disbursed 25 percent of the IDR 695 trillion (USD 46.8 billion) it has budgeted for this purpose.
In creating credit profiles on businesses, AFPI members have collected data on 25 million of them since June 2020. AFPI manages this data using a suite of analytics designed specifically to reach underbanked Indonesians and their micro-, small and medium-sized enterprises (MSMEs). Hence, it could be used to help disburse relief funds to citizens and businesses the government is seeking to target.
The majority of AFPI members are peer-to-peer (P2P) lenders. Chatib Basri, a member of the advisory board of AFPI said, “One of the merits of P2P platforms is data. And this data is the main problem in the disbursement of [funds from the government, whose]… data is outdated, especially for the lower-middle-income segment…. There needs to be a good collaboration between regulators and the industry. Collaboration on data could be a ‘quick win’…”.
By Kate Finster, Research Associate
Sources and Additional Resources
The Jakarta Post article on AFPI proposal
https://www.thejakartapost.com/news/2020/09/06/fintech-firms-offer-to-help-disburse-govt-covid-19-funds.html
AFPI homepage
https://afpi.or.id/
The Jakarta Post article on increasing Indonesia’s pandemic relief budget
https://www.thejakartapost.com/news/2020/06/16/indonesia-increases-covid-19-budget-again-amid-soaring-deficit.html
Bank Indonesia press release
https://www.bi.go.id/en/ruang-media/siaran-pers/Pages/sp_225520.aspx
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