BALI -- The Indonesian Joint Funding Fintech Association (AFPI) is focused on developing a portion of 75 percent of productive credit by 2024 to support micro, small and medium enterprises (MSMEs).

"Financial technology providers focus on productive loan portfolios, not only focus on consumptive ones," said AFPI Deputy Head of Public Relations I Made Wisnu Saputra on the sidelines of a discussion with the Bali Financial Services Authority (OJK) in Kintamani, Bangli Regency, Bali, Monday (11/12 /2023).

The association, which oversees 101 financial technology business actors that bring together lenders and borrowers (peer to peer/P2P lending), noted that the realization of multipurpose or consumptive credit nationally is greater than productive credit.

AFPI noted that it observed that loan realization was still dominated by consumer or multipurpose credit, namely that as of September 2023, the realization of productive P2P lending credit nationally reached IDR 7.8 trillion and consumer credit was higher at IDR 12.9 trillion.

When compared to the same period in 2022, the realization of consumer credit was also higher, reaching IDR 10.1 trillion and productive credit reaching IDR 9.3 trillion.

He believes that P2P lending has a great opportunity to direct credit to the productive sector considering that currently it is estimated that around 46.6 million MSMEs do not have access to credit and as many as 132 million individuals do not have access to credit.

Not only that, he said, the fintech industry also has the opportunity to boost credit realization because it is estimated that there will be a credit gap of IDR 1,650 trillion in 2018. Financing needs reach IDR 2,650 trillion and what the conventional financial services industry can only fulfill is IDR 1,000 trillion.

The results of research by AFPI and Ernst and Young show that the total financing needs for MSMEs in 2026 are projected to reach IDR 4,300 trillion. As for supply capacity, he added, it is only IDR 1,900 trillion, so it is estimated that there is a gap that needs to be filled at IDR 2,400 trillion.

Since its founding in October 2018, this association has recorded that national loan realization until September 2023 reached IDR 696.86 trillion with 1 million lenders and 121.95 million borrowers.

Specifically for Bali, from 2018 to September 2023, P2P lending businesses distributed IDR 8.79 trillion, with total loans in January-September 2023 reaching IDR 846.5 billion.

The number of lenders as of September 2023 reached 16,543 accounts and the total number of loan recipients as of September 2023 in Bali reached 1.23 million accounts.