BRI Invites OVO to Extend Credit to Digital MSMEs
Bank Rakyat Indonesia (BRI) is partnering with a financial technology (fintech) payment company, OVO, to distribute digital loans for Micro, Small and Medium Enterprises (MSMEs) or DigiKu. This program is specifically for business actors who digitize businesses.
EVP Card and Digital Lending BRI Wibawa Prasetyawan said, OVO has data of more than 700 thousand merchant partners. In addition, applying the UMKM data collection scheme with location marking or geotagging. “This enriches our banking data,” he said in a virtual event, Fintech Talk, Thursday (19/11).
Through this collaboration, BRI can reach MSMEs that have never been accessed by banking (unbankable). “The acceptance (of services) in society is so high,” he said. On the one hand, Director of Consumer BRI Handayani said, MSMEs contribute 68% of gross domestic product (GDP) and absorb 97% of the national workforce.
“This cooperation is expected to increase the penetration of our digital products and services to MSME players,” he was quoted as saying in a press release. Therefore, the company took OVO. This is expected to expand and facilitate MSME access to get DigiKu. The loan size is up to Rp 20 million, with a tenor of a month to a year.
VP Lending OVO Natasha Ardiani added, usually, banks rely on the Financial Services Authority (OJK) Financial Information Service System (SLIK) to provide loans. With fintech, technology and data-based credit scoring.
OVO, for example, has geotagging technology and digital-based consumer recognition (e-KYC) through verification of ID cards and merchant locations. “There are things that we can access geographically and whether MSMEs run their businesses according to their ID cards or not,” said Natasha.
Even so, technology alone is not enough to help banking. “There are challenges faced, namely digital literacy, this is not just OVO’s homework, but all financial institutions,” he said.
Alternative Payment for MSMEs
Meanwhile, DigiKu was launched by the government last July (17/7). The association of state-owned banks (Himbara) was also asked to channel Rp 4.2 trillion in loans related to this program.
Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan said that loans are only given to MSMEs that join digital platforms. “However, many MSMEs are hampered by banking administration,” said Luhut during a virtual press conference, last July (17/7).
Luhut assessed that DigiKU could be alternative financing for MSMEs. Because the requirements for applying for credit are claimed to be easier than normal procedures. The submission is said to have only taken 15 minutes.
There Has Been an Increase in the Value of Payments Through E-Commerce
Electronic money service provider OVO recorded an increase in total payment value (TPV) reaching 110% from March to June 2020. The Company continues to encourage transactions in e-commerce by collaborating with Zalora.
According to the Head of Corporate Communications OVO Harumi Supit, there has been a growth in the value of transactions in e-commerce during the Covid-19 pandemic. This is influenced by people’s interest in shopping online, including shopping for fashion items, which has also increased significantly.
“We see a trend of shifting transactions towards digital and online sales which continues to increase during the pandemic, especially in online commerce. It is evident that our total payments value in online commerce has grown by 110% from March to June 2020,” Harumi said in a written statement. , Thursday (19/11).
He said, seeing the opportunity for the potential growth of payment transactions in e-commerce, his party is now also partnering with Zalora. The company believes that strategic collaboration with various online commerce partners, including Zalora, can also help accelerate national economic recovery while continuing to support the transition from offline to online transactions.
Harumi added, that OVO’s open ecosystem strategy provides flexibility for companies to innovate and collaborate. This is primarily to answer the needs of users and better serve Indonesia, especially during the pandemic.