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s more financial service companies go digital and high-technology startups emerge in Indonesia, diversified conglomerate Mayapada Group is jumping on the country’s digital bandwagon, effectively expanding its business line to financial technology with the launch of Pohondana.id.

Victoria Tahir, the CEO of Pohondana.id, said the peer-to-peer (P2P) lending firm was established to provide advanced financial services and solutions targeted at lower- and middle-class Indonesians in a bid to boost the government’s financial inclusion program in collaboration with private lender PT Bank Mayapada International.

“The idea to establish Pohondana.id was simple. As our group has banking and multifinance companies, it was reasonable that our next step was fintech,” Victoria said during the launch, adding that the firm was targeting Indonesia’s unbanked society.

According to the 2017 World Bank Global Findex, Indonesia made the most progress in financial inclusion across East Asia and the Pacific with 48.9 percent bank account ownership in 2017 from 36 percent in 2014 and 20 percent in 2011. However, the latest data also shows that 51 percent of the country’s population do not have bank accounts.

Victoria said Indonesia was fertile ground for the fintech industry. Quoting a report by the Financial Services Authority (OJK), she said the funding gap in the country due to a lack of access to bank loans stood at Rp 800 trillion (US$54.864 billion), adding that market demand in the industry was quite high.

“According to the OJK, the total value of loans disbursed by registered fintech players [in the P2P lending industry] has reached more than Rp 13 trillion. And the growth is rapid,” she said, adding that Pohondana.id was targeting to loan Rp 1 trillion to an estimated 20,000 customers next year.

According to the OJK, hundreds of fintech companies were operating in Indonesia, but only 78 were registered, although registration with the relevant authorities — either the OJK or Bank Indonesia — was one of the requirements to operate in the country.

Pohondana.id registered with the OJK in August, but was allowed to operate while waiting for its legal permit. At the time, Yu Ek, its president director, said the firm had loaned Rp 140 billion to an estimated 6,000 customers.

“They were all micro, small and medium enterprise [MSME] players. Each customer received a loan of Rp 20 million,” Yu added.

Pohondana.id had an office that other P2P lending institutions do not have, said Yu, adding that it also offered competitive interest rates — 1.5 to 2 percent per month. The company is also aiming to simplify the loan mechanism for its customers.

Victoria said the firm does not charge administration fees because it prioritized transparency.

“Admin fees and so on can confuse customers. That’s why we have interest rates to avoid confusion. Transparency is our priority,” said Victoria who is the daughter of Mayapada Group founder Dato Sri Tahir.

Yu said Pohondana.id planned to expand in eastern Indonesia, adding that the region had strong digital financing possibilities, even though it had geographical challenges.

“We want to provide an equal opportunity to the [eastern Indonesian] region because conventional banks are mostly situated in Java.”

Pohondana.id also plans to finance survivors of the earthquake and tsunami that struck Palu, Central Sulawesi, and neighboring cities. (das)