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Fintech Startup Requested to Distribute Loans to 8,140 MSMEs

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Fintech Startup Requested to Distribute Loans to 8,140 MSMEs Affected by Corona

The government noted that 22% or 8,140 of a total of 37 thousand Micro, Small and Medium Enterprises (MSMEs) that were hit by the corona pandemic, needed business capital. Financing technology companies (fintech lending) are considered to be able to provide loans.

Moreover, data from the Central Statistics Agency (BPS) showed that the number of poor people in March rose 1.63 million people compared to September 2019. This increase was due to the Covid-19 pandemic.

Fintech Startup Requested to Distribute Loans to 8,140 MSMEs

Institute for Development of Economics and Finance (Indef) researcher Nailul Huda rate, the government can minimize the impact of the coronavirus pandemic by providing venture capital to MSMEs. In this case, fintech lending can be involved.

“There are several alternative financing opportunities, such as fintech lending and equity crowdfunding. This can contribute actively to minimize the impact of Covid-19 to MSMEs that need funding,” Nailul said when attending virtual discussions on Wednesday (7/15).

Based on Indef’s research, startups in the fintech lending sector contributed 0.45% to last year’s economic growth. Its value is more than IDR 60 trillion. Fintech lending is also said to be able to absorb 362 thousand workers.

Based on that research, startups in this sector reduce poverty numbers to 177 thousand people and reduce inequality (Gini ratio) 0.01. Therefore, according to him, the government could encourage fintech lending to provide loans to MSMEs during this pandemic.

Loans at Fintech Startups Increase

Previously, KoinWorks COO Bernard Arifin said demand for loans through his platform had indeed increased during this pandemic. However, companies have tightened lending to minimize the risk of default.

KoinWorks is also targeting the MSME sector that can survive, by relying on digital technology. Therefore, the company hooked up e-commerce to provide loans to MSMEs. Modalku also recorded an increase in demand for loans from MSMEs. The company has also channeled IDR 4.1 trillion in funding throughout the first semester.

Fintech Startup Requested to Distribute Loans to 8,140 MSMEs

Modalku Co-Founder & CEO Reynold Wijaya said, MSMEs that received capital was dominated by the trade sector. “We will continue to monitor the development of a new normal phase because the process of economic recovery, especially MSMEs is not easy,” he was quoted as saying in a press release.

Modalku provided an option to restructure loans to MSMEs whose business was hit by Covid-19. There are around 2% active Modalku borrowers who are proposing restructuring and are being processed by the team. Most of the restructuring proposed by the borrowers due to a decrease in turnover.

“With the principle of responsible lending, we will continue to carry out comprehensive selection steps, restructuring programs, and support the Health sector,” he said.

The Ministry of Cooperatives and SMEs Collaborate with Fintech and Startup to Support MSMEs

The Ministry of Cooperatives and Small and Medium Enterprises (Kemenkop UKM) is collaborating with a number of startups in the marketplace and financial technology (fintech) to support the development of MSMEs in the agriculture, fisheries and marine sectors through digital platforms.

Some startups include Tanihub, Aruna, Livestock, Hara, Natural, People’s Capital, Vegetable Box, and Ecosis. Support will be provided in the form of financing as well as access to markets with a wider reach.

Fintech Startup Requested to Distribute Loans to 8,140 MSMEs

The Ministry of SME, Teten Masduki, said that this was a special direction from President Joko Widodo so that MSMEs were connected to the domestic and foreign markets.

“All ministries have subsidy programs. Then the government is sharing land, now for nets. Now, because there is no business model built, there is no integration with its market funding, which is less than maximum,” Teten said at a press conference at his office on Wednesday (15 / 7).

Teten said, marketplaces such as Tanihub, Aruna, and Sayurbox can become buyers (off-taker) of agricultural and fishery products. Including agricultural products produced by urban communities from narrow land.

“Our teamwork is mutually collaborating, now we have a digital market, digital applications,” he added. Teten targets 10 million MSMEs to join the marketplace and access financing from fintech in collaboration with Kemenkop UKM.

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