Indonesia Alternative Lending Business Report 2023: Market is Expected to Grow by 31.7% to Reach $6.51 Billion in 2023 - Forecasts to 2027 - ResearchAndMarkets.com

The "Indonesia Alternative Lending Market Business and Investment Opportunities Databook - 75+ KPIs on Alternative Lending Market Size, By End User, By Finance Model, By Payment Instrument, By Loan Type and Demographics - Q2 2023 Update" report has been added to ResearchAndMarkets.com's offering.

Alternative lending market in Indonesia is expected to grow by 31.7% on an annual basis to reach US$ 6.51 billion in 2023.

Medium to long term growth story of alternative lending in Indonesia remains strong. Alternative lending adoption is expected to grow steadily over the forecast period, recording a CAGR of 17.8% during 2023-2027. The alternative lending market in the country will increase from US$ 4.94 billion in 2022 to reach US$ 12.56 billion by 2027.

This report provides valuable insights into the intricate relationships between payment instruments and lending models, offering a comprehensive analysis of transaction dynamics.

It uncovers the multifaceted nature of loans, ranging from personalized B2C offerings like payroll advances to strategic B2B solutions such as lines of credit. In addition to these insights, it delves into consumer attitudes and behaviors, deciphering the influence of factors like age, income, and gender on financial decision-making.

The Indonesian alternative lending industry is poised for substantial growth in the coming five years. Factors contributing to this growth include increasing internet penetration and the expanding fintech ecosystem. Furthermore, the prevailing high inflation rates and the consequent reduction in consumer disposable income are expected to drive loan disbursements by alternative lenders.

To meet the rising credit demand among Indonesian consumers, global fintech players are anticipated to extend their digital lending offerings to the Southeast Asian market.

There is also a growing demand for credit among small and medium-sized businesses, leading digital lenders to introduce products tailored to the B2B segment. These developments point to a period of robust growth for the alternative lending market in Indonesia in the next five years.

Foreign fintech firms are planning to expand their digital lending solutions in Indonesia

A high percentage of the Indonesian population does not have access to basic financial services. This has resulted in more and more consumers turning to alternative lending providers to access credit in Indonesia. As a result, global fintech firms are expanding their presence in the Southeast Asian market to tap into the growing credit demand.

In February 2023, Lentra, an India-based digital lending platform, announced that it has entered the Indonesian market. The foray into the Southeast Asian region comes on the back of a US$60 million fundraising, which was led by Bessemer Venture Partners, Citi Ventures, and SIG. In addition to Indonesia, the firm has also forayed into the Philippines and Vietnamese markets. With this expansion, it plans to reach US$100 million in annual recurring revenue by March 2024.

In September 2022, Hong Kong-based digital lender WeLab also announced its expansion in Indonesia after the acquisition of Jakarta Bank, which operates 11 commercial branches in the country. WeLab, in partnership with other investors, spent US$509.6 million to acquire the Indonesian commercial bank and plans to launch digital banking services for the tech-savvy population in the Southeast Asian market in 2023.

Going forward, the publisher expects more foreign players to expand their footprint in the Indonesian market, as the burgeoning fintech landscape will provide firms with a high-growth environment.

The growing buy now pay later industry will aid the growth of the alternative lending market in Indonesia

The convenience and flexibility offered by buy now pay later schemes have resulted in widespread adoption of the payment method among consumers over the last few years. This trend is projected to further accelerate, as lower credit card penetration and financial inclusion drive more consumers to BNPL schemes. GoTo, Kredivo, and Akulaku are among the different players seeking to gain market share in one of the fastest-growing fintech sectors in Southeast Asia.

With growing competition in the e-commerce sector, these short-term loan providers are strengthening their in-store network. Akulaku, for instance, has partnered with more than 40,000 offline retailers in Southeast Asia and is planning to further expand partnerships with merchants, both online and offline. These strategic collaborations, coupled with growing adoption among shoppers, will keep aiding the growth of the alternative lending industry in Indonesia over the next five years.

Digital lenders are expected to launch new lending solutions catering to the needs of businesses in Indonesia

In addition to the growing demand for alternative lending products in the B2C segment, the need for credit is also on the rise in the B2B category, especially for small and medium-sized businesses. The current macroeconomic environment, including high inflation and interest rates, means that access to traditional credit is becoming expensive for SMEs.

Consequently, more and more businesses are expected to turn to digital lenders to meet their working capital requirements. As a result, the publisher expects alternative lending providers to launch new products and solutions catering to the needs of businesses in Indonesia.

Digital lenders such as PT Bank Neo Commerce have already announced the launch of new lending products for SMEs in Indonesia. This launch is aimed at driving the monthly active users of its applications to over 50%, compared to 30% to 40% as of November 2022.

Going forward, alternative lenders are also expected to follow the same strategy. The launch of these products, coupled with the entry of new fintech firms in the segment, will keep driving the competitive landscape as well as innovation in the Indonesian alternative lending industry over the next five years.

Key Attributes:

Report Attribute	Details
No. of Pages	164
Forecast Period	2023 - 2027
Estimated Market Value (USD) in 2023	$6.5 Billion
Forecasted Market Value (USD) by 2027	$12.6 Billion
Compound Annual Growth Rate	17.8%
Regions Covered	Indonesia

Scope

Indonesia Alternative Lending Market Size and Forecast by Loan Types

• B2C Loans
• Personal Loan
• Payroll Advance
• Home Improvement
• Education/Student Loans
• Point of Sale
• Auto Loans
• Medical Loans
• B2B Loans
• Lines of Credit
• Merchant Cash Advance
• Invoice Factoring
• Revenue Financing

Indonesia Alternative Lending Analysis by Consumer Attitude and Behaviour

• By Age
• By Income
• Gender

Indonesia Economic Indicators

• Gross Domestic Product at Current Prices
• Population
• Unbanked Population
• Unemployment Rate
• Loan Default Rate

Indonesia Alternative Lending Market Size and Forecast

• Transaction Value
• Average Transaction Value
• Transaction Volume

Indonesia Alternative Lending Market Size and Forecast by End User

• End User - Business
• End User - Consumer

Indonesia Alternative Lending Market Size and Forecast by Finance Models

• P2P Marketplace Consumer Lending
• P2P Marketplace Business Lending
• P2P Marketplace Property Lending
• Balance Sheet Consumer Lending
• Balance Sheet Business Lending
• Balance Sheet Property Lending
• Invoice Trading
• Debt Based Securities
• Equity Based Crowd Funding
• Real Estate Crowd funding

Indonesia Alternative Lending Market Size and Forecast by Payment Instrument - Transaction Value, Volume and Average Value

• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money

Indonesia Alternative Lending Market Size and Forecast by Payment Instrument to Model

Alternative Lending Market Size and Forecast by Payment Instrument to P2P Marketplace Consumer Lending

• Cash
• Cheques
• Credit Transfer
• Direct Debits
• Debit Card
• Credit Card
• E- Money

Alternative Lending Market Size and Forecast by Payment Instrument to P2P Marketplace Business Lending

Alternative Lending Market Size and Forecast by Payment Instrument to P2P Marketplace Property Lending

Alternative Lending Market Size and Forecast by Payment Instrument to Balance Sheet Consumer Lending

Alternative Lending Market Size and Forecast by Payment Instrument to Balance Sheet Business Lending

Alternative Lending Market Size and Forecast by Payment Instrument to Balance Sheet Property Lending

Alternative Lending Market Size and Forecast by Payment Instrument to Invoice Trading

Alternative Lending Market Size and Forecast by Payment Instrument to Debt Based Securities

Alternative Lending Market Size and Forecast by Payment Instrument to Equity Based Crowd Funding

Alternative Lending Market Size and Forecast by Payment Instrument to Real Estate Crowd funding

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