Suleiman predicted that foreign companies such as Ant Financial and Tencent will make substantial moves in the Indonesian fintech space in the coming months. But for the time being, Suleiman said the market is dominated by local companies that engaged with regulators as the guidelines were being created and were primed to grow once the legal structure was in place.

Indonesia’s Financial Services Authority (OJK) stipulated that startups must have $200,000 in capital before they can be approved for an operating licenses as lenders, and capped loan values at $150,000. For now, that amount suits most P2P lenders just fine, Suleiman said. He noted that small and medium enterprises (SMEs) and consumers are the target customers of most P2P startups. “Peer-to-peer lending will serve the [consumer] market of those who have never been served,” Suleiman said, referring to individuals’ who lack the collateral or credit histories to receive bank loans. “There’s a lot of SMEs that have not managed to secure funding from banks, and there’s a large market here that can be tapped by peer-to-peer lending.”


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A 2016 report from the International Finance Corporation and USAIDdescribed Indonesia’s SME market as “one of the fastest-growing sectors in the country.” The report estimated that the potential demand for credit among women-owned SMEs alone falls around $6 billion, leaving the space wide open for startups that are willing to use alternative credit scoring to serve their customers.

Suleiman said that most SMEs fail to secure traditional bank funding because they don’t have enough collateral, which he said is especially problematic in creative industries. But he added that a lack of agility on the banks’ parts is also to blame. “Some peer-to-peer companies that are operating in Indonesia are working on new business models that are not currently available in the market, like invoice financing or ecommerce POS financing. These are not a typical bank’s products, and I think banks are a bit slow in introducing new products, and that is why peer-to-peer lending … [will address] the needs of the SMEs,” he said.  

One company meeting the demand for SME financing is Investree, a P2P marketplace startup that launched in 2016. Adrian Gunadi, Investree’s co-founder and CEO, said the company is filling the needs of businesses that seek short-term loans as cash flow solutions and retail investors who don’t participate in the stock market