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Evolving financial services: Online lending and digital payments lead the way
By 2025, Indonesia is projected to see more than $40 billion in digital loans—almost double from last year.
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A
s technology continues to reshape the global financial services landscape, Indonesia is expected to witness significant growth in two key sub sectors in the coming year: online lending and digital payments.
“Against the backdrop of payments democratization and commoditization, digital payments are poised for high single-digit or even double-digit growth in the years ahead. Lending and banking are also expected to outpace other verticals,” predicts Natasha Ardiani, co founder and COO of payment aggregator Durian Pay.
While other tech-powered innovations in finance like wealth management, insurtech (insurance technology), cryptocurrencies and personal finance management will experience growth, it will be at a more gradual pace, she said.
However, it is the services aimed at serving Indonesia’s large unbanked population—still comprising 97.7 million people, 48 percent of the total population—that will continue to transform the financial landscape dramatically.
Online lending momentum
Alternative sources of loans and credit, such as peer-to-peer (P2P) lending services and buy-now-pay-later (BNPL) schemes, have seen incredible growth over the past year.
According to data from the Financial Services Authority (OJK), P2P lending experienced robust 18.05 percent year-on-year (yoy) growth as of November 2023, reaching a substantial nominal financing of Rp 59.38 trillion (US$3.75 billion).
