Fintech - Indonesia€¦ · Jabodetabek, Semarang , Surabaya, Thailand (Dec’18) Co- Founder& CEO...

Recent Development in Fintech - Indonesia

Danang KusumaVP of Digital and Strategic Partnership Investree

This presentation document is strictly confidential and solely for the use of PT Investree Radhika Jaya.

The content have been summarized to suit presentation needs; for actual definitions, descriptions and

exclusion, please refer to the corresponding directorate.

2018 | PT Investree Radhika Jaya

| Background1

Copyright © 2018 | PT Investree Radhika Jaya

The world is changing. Pay attention to

technological changes: they will transform our lives

Disruption(Job Displacement)

Artificial

Intelligence

Internet

Everythings

Industrial

Revolution 4.0

Top 10 Best Jobs for The Future

1. App Developer

2. Computer System Analyst

3. Nurse Practicioner

4. Physical Therapist

5. Health Service Manager

6. Physician Assistant

7. Dental Hygienist

8. Market Research Analyst

9. Personal Financial Adviser

10. Speech language Pathologist

Source: CNBC

Indonesia is Entering Digital Economy Era in Earnest.

How digital has touched every aspect of our life

Source : BI Fintech Office


… and technology eliminates certain professions:

be well informed, change your paradigm

Fiat

Money

Cryptocurrency

Financial

Services

Source:Kementerian Kooordinator BidangPerekonomian

Key Driver #1

Penetration of internet & smart phones in Indonesia

TOTAL

POPULATIONINTERNET

USERS

ACTIVE SOCIAL

MEDIA USERS

UNIQUE

MOBILE USERSACTIVE MOBILE

SOCIAL USERS

265.4Million

132.7Million

130.0Million

177.9Million

120.0Million

URBANISATION

56%PENETRATION

50%PENETRATION

49%PENETRATION

67%PENETRATION

45%

TOTAL NUMBER OF PEOPLE

PURCHASING CONSUMER

GOODS VIA E-COMMERCE

28.7Million

YoY CHANGE

56%

TOTAL NUMBER OF PEOPLE

PURCHASING CONSUMER

GOODS VIA E-COMMERCE

11% US$7.056Billion

YoY CHANGE

+22%

VALUE OF THE CONSUMER

GOODS E-COMMERCE MARKET

(TOTAL ANNUAL SALES REVENUE)

US$251

YoY CHANGE

+8%

AVERAGE ANNUAL REVENUE

PER USER OF CONSUMER

GOODS E-COMMERCE (ARPU)

BELIEVE THAT NEW

TECHNOLOGIES OFFER MORE

OPPORTUNITIES THAN RISKS

71%

PREFER TO COMPLETE

TASKS DIGITALLY

WHENEVER POSSIBLE

68%

BELIEVE DATA PRIVACY

AND PROTECTION ARE VERY

IMPORTANT

79%

USE AN AD BLOCKING

TOOL TO STOP ADVERTS

BEING DISPLAYED

50%

DELETE COOKIES FROM

INTERNET BROWSER TO

PROTECT PRIVACY

57%Source: We Are Social 2018 Copyright © 2018 | PT Investree Radhika Jaya


…and key driver #2 the changing behaviour

of the millennials.

From brand to value : search, rating, review Socmed is

the new leisure hub

Sharing is the new having

End of mainstream

media

Bapergeneration

From goods to

experience

The end of 9am-5pm Instant

famous

Am lazy, self absorbed, entitled, like to be in group

DIGITAL IMMIGRANT

This older generation knew internet when they

were an adult. They often feel the need to

always learn to adapt with the new technologies.

This younger generation born and living in the

internet era. They tend to make trends in

cyberspace.

DIGITAL NATIVE

Source: Yuswohadi-15 Millennials Big Trends

FintechAddressing the Financing Gap2

International Overview: Business Growth

Significant growth, albeit more room to grow


Source:

Fintech Credit (Market structure, business models and financial stability implications, BIS paper from the Working Group established by CGFS and FSB dated 22 May 2017,

*The United Kingdom has 21 platforms with full regulatory authorisation; a further 66 are being assessed for authorisation, of which

32 have an interim permission.

^ Bank Indonesia, as of 2017, Indonesia has 235 platforms, of which 142 are registered with Indonesia Fintech Association

FINTECH CREDIT MARKET STRUCTURE

JurisdictionNumber of

Platform(Latest Year)

Market share of

largest

Platforms(Latest Year in%)

Size of Fintech

Credit Market in

2013(in USD Millions)

Size of Fintech

Credit Market in

2015(in USD Millions)

China 356 25% 5,547 99,723

US 67 80% 3,757 34,324

UK* 119 68% 906 4,126

Europe 136 80% 173 760

Australia 29 90% 12 276

Indonesia^ 142 80% - 15

International Overview: Business Mix and Offering

Different business models/products within lending space


Source:

Fintech Credit (Market structure, business models and financial stability implications, BIS paper from the Working Group established by CGFS and FSB dated 22 May 2017,

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

USA

UK

CHINA

INDONESIA

ASIA PACIFIC

Volumes in 2015 by sector, ranked by consumer lending

Consumer Lending Business lending Invoice Trading Real Estate

International Overview: RegulationsDiffering regulations lead to differing outcomes


JurisdictionTax

incentivesRegulations

Licensing/

authorisation

Investor

protections

Risk

management

requirements

Regulator

China YesYes

Yes - YES CBRC

Indonesia - Yes Yes Yes Yes OJK

France Yes Yes Yes - Yes AMF & ACPR

Singapore - - - - - MAS

United

KingdomYes Yes Yes Yes Yes FAS

United States - - - - - FCA

Source:

FSB, Fintech Credit, Market structure, business model and financial stability implications – May 2017, market analysis

In order to facilitate market growth, authorities in China, France and the United Kingdom have introduced tax incentives for investors in FinTech lending

platforms. In China, local governments are allowed to have various preferential tax policies and incentives in place for online lending platforms that are seeking

investment in high-tech companies.

Many jurisdictions have innovation facilitators which promote FinTech more broadly – these can be divided up into (i) regulatory sandboxes, (ii) innovation hubs

and (iii) accelerators

F e a t u r e s O f D e d i c a t e d F i n t e c h C r e d i t P o l i c y F r a m e w o r k s

Copyright © 2018 | PT Investree Radhika JayaSource: AFTECH, Mckinsey 2016

65 %

26 %

36 %

40 %(361 billion)

12 %(251 billion)

34 %(152 billion)

What are the Pain Points:

Low financial inclusion, and huge credit gaps


$75-130

$20-30 for account opening

$6-8 for deposits/withdrawals

$50-100 for payments &

transactions

Cost of providing financial services

annually in emerging markets by

banks

$10-2080-90% lower

FINTECH

o Fintech offer significant lower cost of customers acquisition, cost of monitoring, cost of collection using tech as key enabler

o The fintech digital model cost only 10-20% of the conventional bank model in the emerging markets

o It will cause margin compressions in the banking sector

• 15-40% in revenues across various segment

• 25-60% in profits across various segment

• Most impacted segment in this order: consumer finance, payment , SME lending, wealth management

Why Fintech 80-90% lower cost

Source: McKinsey Global Institute (2016)

Fintech Story in

Indonesia December 2017


Regulators:

POJK 77 – P2P lending

Payments

Fintech Potency:

Credit market gap

IDR 800 trillion (USD 70

bio)

Bank account ownership

40% (2016)

E-commerce Growth

60% Y-O-Y

Mobile penetration

130%

Demography bonus

(<30yrs)

50%

Indonesian Fintech Association

137

235

Registered Indonesian Fintech Fintech Companies

34%

39%

10%

4%

10% 3%Lending

Payment

Investment management

Insuretech

Market provisioning

Equity Capital Raising

Types of Fintech (in %)

Source: AFTECH

Indonesia Fintech

Landscape2017

PAYMENTS LENDING

INSURETECH

MARKET PROVISION

INVESTMENT

Anggota-anggota kami

PAYMENTS LENDING MARKET PROVISION

INVESTMENT

INSURETECH

CASH LOAN

Copyright © 2018 | PT Investree Radhika JayaSource: AFTECH

3 InvestreePioneer Peer to Peer lending in Indonesia

to connect Borrowers and Lenders in a More Accessible,

faster and more efficent way

Borrower Lender

Impact investing

Retail and accredited

investors

Administer Loan Process

Legal Agreements, repayment and monitoringProvide Credit Risk Analysis

using Alternative Data

Matching Borrower

and Lender

Fast and flexible

business loans

Credit insurance

Financial Services

Authority (OJK)

Credit Bureau

Bank or Institutional

Lenders

Online Merchants

Suppliers and vendors

Small Manufactures

Resellers

Our Model is to Collaborate

with Existing Financial Ecosystem

Investree’s Key Strategic Positions Why We Are Different

Experienceproven industry track record developed over various economic cycles, helmed by

seasoned management team (avg >15 years banking experience in BOD/BOC)

SME & Customer FocusComprehensive product offering (including conventional and Shariah finance products) for multiple

customer segments to serve unbanked SMEs and investor’s needs

EcosystemsDevelop Strategic ecosystems to create scalable growth and capture, cost-efficient, synergies with

our shareholders, borrowers, investors and institutions.

Tech, Innovation and RiskStrong emphasis on tech, innovation and risk to provide more accessible, faster and more efficient

products. Dedicated risk management team with solid technology support functions, an incremental

approach

Robust OperationsScalable and robust operational process to ensure efficient and secure transactions. ISO 27001

certified

Our Background

▪ Launched in May 2016

▪ Registered OJK in May 2017

▪ Senior team’s average 15 yrs banking

know-how combined with innovative tech

▪ 115 full-time employees

Our Investors – Series B

Closed Series – B round closed in June 2018 growth

capital to support expansion plans

Our Footprint

▪ Jabodetabek, Semarang , Surabaya, Thailand

(Dec’18)Co-Founder & CEO

Adrian GunadiCo-Founder

DR. Amiruddin

Senior Advisor

Muliaman D. Hadad Phd

Technical Advisor

Sharia Business

Azharuddin Lathif, M.Ag, MH

Chief of Sales

Salman Baharuddin

Chief Risk Officer

Amalia SafitriChief Operation Officer

Ade FauzanChief Information Officer

Dickie WidjajaChief Strategy Officer

Anthony Man

Co-Founder & Advisors

Senior Management Team

Our Key Product Suite

Invoice financing

Buyer financing

Government Retail Bond

Merchant Cash Advance

Online Seller Financing

• Short term invoice financing of reputable payors

up to IDR 2 Bio or USD 138.000

• 80% of Invoice value

• Flexible tenor with bullet repayment options

avalable between 30-180 days

• Safe repayment through escrow a/c

• Loans available for buyers/distributors/reselllers of

the supply chain

• Loan size starts from IDR 2 Bio or USD 138.000

• Fast churning product for repeat buying, integrated

ecosystem play

• Mandated by Ministry of Finance for Online

Distribution of Government Bonds

• Online distribution

• Risk free investment grade

• Investment starts from IDR 1 Mio or USD 68

• Working capital loans to users of reputable

payment gateways

• Loan size up to IDR 2 Bio or USD 138.000,

tenor up to 12 months.

• Fixed monthly repayment routed by payment

gateway partner.

• Historical data based working capital loan to sellers

on E-commerce marketplaces.

• Loan size upto IDR 2 Bio or USD 138.000

• Tenor 24 months

Available in Conventional or Islamic finance format

PerformanceIndicator

LOAN ORIGINATION (USD Million)

52 BioDEC 2016

1.56 TPRESENT DAY

NUMBER OF REGISTERED LENDERS

516DEC 2016

25,780AUGUST 2018

NUMBER OF LOANS

232DEC 2016

2,788AUGUST 2018

NPL

0,2% AVG TENOR

59 Days

AVG LOAN RETURN

16.6 %Invoice

FinancingMerchant

Cash

Advance

Online

Seller

Financing

Savings

Bond

Ritail 003

52

528

1,096 50 11 14

2,4

1,8

Collaboration with Financial Industry Stakeholders

• Fintech lending

regulation – POJK 77

• Regulatory reporting

(Monthly & Quarterly

report)

• Host-to-Host

Reporting for greater

disclosure

• Cash Management

services

• Lead Generation

• Channeling /

Institutional Lending

Capital

• Indonesia Credit

Bureau

• Provide Historical

Credit Performance

Data

• Sharing Blacklist

Data

• Indonesia Credit

Insurance

• Credit enhancement

facility

• 75% insurance cover

up from loan amount

to all Lenders


Our Ecosystems

Working with Strong Anchors

Invoice

Financing

B2B

Employee LoanDigital

Financing

Institutional

Lenders

Regulated and Supervised by the Regulators

Our EcosystemWorking with Strong Anchors

1 Sellers apply loan through

seller’s dashboard in e-

commerce

2 Data interfae from

e-commerce

marketplace to

streamline data

from seller

onboarding

process

3 Investree’s credit

bereau partner

analyze Borrower’s

loan

4Lenders lend their money

through Investree platform

6Investree returns lenders

money included interest

5Borrower commit

repayment directly to

Investree

Seller

Credit Assessment

Bank or Institutional

Lender

E-Commerce

Average number of

applications per day

We took Online Seller Financing

scheme as an example

Awards &

Recognition


Awarded by

INDONESIA MOST CREATIVE

COMPANY 2017

Awarded by

BEST CASH MANAGEMENT

SOLUTION

Awarded by

BEST PEER-TO-PEER LENDING

PLATFORM

FOR SMEs 2017

BEST FINTECH

ENTREPRENEUR

Awarded by

INDONESIA FINTECH

OF THE YEAR 2017

Awarded by

4 Q & A

AIA Central Building 21st Floor

Jl. Jend. Sudirman Kav. 48 A

Jakarta Selatan, 12930

+62 21 2253 253

[email protected]

www.Investree.id Investree @InvestreeID Investree

This presentation document is strictly confidential and solely for the use of PT Investree Radhika Jaya.

The content have been summarized to suit presentation needs; for actual definitions, descriptions and

exclusion, please refer to the corresponding directorate.

2018 | PT Investree Radhika Jaya

Fintech - Indonesia€¦ · Jabodetabek, Semarang , Surabaya, Thailand (Dec’18) Co- Founder& CEO...

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