We estimate that limited access to credit for these companies reduces Indonesia’s GDP by approximately US$130 billion, equating to 14% of total GDP (according to 2015 figures), and marketplace lending can play a major role in facilitating this goal by providing improved access to credit for a broader range of Micro and SME businesses (MSMEs).
Other key points:
- China is an interesting parallel to Indonesia. Its structural imbalances have created huge gaps in MSME financing (estimated size of over US$700BN) and surplus demand for return seeking investable assets (estimated size of over US$2.3TN).
- We believe marketplace lending platforms can be a transformative force in Indonesia. However, Fintechs, Banks and Regulators need to work together and pursue a coherent agenda of self-interest alongside industry development to realize this opportunity.
- Marketplace lending dynamics in China (Exhibit)