Peer2Peer Lending ‒

Addressing the Financing Gap

Adrian A. Gunadi ‒

Co-Founder & CEO Investree

Wakil Ketua Asosiasi Fintech Indonesia

Agenda

1 Key  Demographics

2 P2P  – Game  changer  in  financial  industry

3 Key  Highlights
Data 2015
 Source: BCG 2015

Retail  Credit  to  GDP     159%

Limited access SME    Credit  to  GDP    
132%
125%
to finance
80% 85%
61%
Low  financial  penetration   51%
causes  difficulty  in  getting  a   40%
22%
loan  in  Indonesia. 10%

Indonesia India Singapore Thailand Malaysia

37 Credit  Card  Penetration

96 Bank  account  penetration
81 78

53
12 36
5 4
3

Singapore Malaysia Thailand India Indonesia Singapore Malaysia Thailand India Indonesia
Lending Facts 42%
Families  and  Friends
is  the  most  dependable  source  of  
Based  on  sample  there  are  57%  of  Indonesian   financing.
people  who  borrowed  money  for  any  reason  
and  from  any  source  in  the  past  12  months.

12%
57% Financial  Institutions

3%
Informal  Lender

Source:  World  Bank  Report2015

The Financing Gap ‒ SME &
Consumer
Business  Segment Consumer  Segment
Loan  purposes
Loan  purposes
• Housing  loans

BANK’S  PRIMARY  TARGET

• Working  capital Upper  income
• Investment Corporate • Home  Renovation
(>Rp 200  bio  sales   (>Rp 60  mio per  year) • Vehicle  loans

BANK’S  PRIMARY  TARGET

Means  of  financing
per  year) • Education
• Umroh
• Internal  funds  (86%) • Marriage
• Bank  loans  (6%) Mass  affluent  income • Medical  
• Supplier  credit  (1%) Commercial  (Rp 50-­200
• Others  (7%) bio  sales  per  year) (Rp 36-­60  mio per  year) Target  market

Key  hurdles
• Employee  –
jobber
First  

P2P  Lending  Space

• No  Collateral Medium • Millennials
• No  credit  history
P2P  Lending  Space

• Long  credit  application   (Rp 2.5-­50  bio • Contract  employee

processing  time sales  per  year) Mass  income
(Rp 18-­36  mio per  year)
Solution
Small
Solution
(Rp 300-­5000  mio   • Company  
• Invoice  Financing sales  per  year)
partnership
• No  fixed  asset  collateral • Streamlined  
• Escrow  account process
• 100% online   • Unsecured,  but  
Lower  income salary  deduction
Micro  SME
<Rp 300  mio   (<Rp 18  mio per  year) • 100%  online  
Source: World Bank
sales  per  year • Big  data  anaytics
Investor Problem
high  barrier  to  entry  for  individuals  to  invest
Lack  of  investment  alternatives  that  allows  retail  &  institutional  
investors  to  invest  small  amounts  of  monies  in  short  term  +  well  
structured/  secured  +  high  yields.

Source : Oliver Wyman 2015

Going forward - Concerted effort
to promote digital financial inclusion

Financial   Regulatory  
Inclusion Opportunities Key  Player
Support

Telco
36% >100%
Bank  account  penetration mobile  phone  penetration Strategic  Initiatives
• E-­Wallet
50% •
•
National  Payment  Gateway
Fintech  Office Bank
4% annual  growth  of  
eCommerce  transaction
Credit  card  penetration

>100  mio
90% internet  users  in  2016
Strategic  Initiatives
• Branchless  Banking  – Laku
Startup
Loan  deposit  ratio Pandai
• P2P  Lending  Regulation
Solution:
Peer-to-peer Lending P2P  Lending  is  lending  and  borrowing  activities  that  is  
done  online  in  a  place  called  marketplace
Marketplace Platform role  is  to  run  the  Marketplace.  Our  Marketplace  matches    people  
who  want  to  lend  money  with  people  who  want  to  borrow  money.  We  enhance  
yield  for  investors  while  making  loans  more  affordable  accessible  for  
borrowers.

Borrower Lender

Where  borrowers  get Where  lenders  lend

their  loans  funded their  money  
P2P Proposition
For Borrower

Speed Simplicity Competitive Rates

Borrowers  can  now  enjoy  a   100%  online,  signing  up  and   Attractive  rates  by  matching  
streamlined  loan  application   applying  for  loan  is  quick  and   borrowers  directly  with  their  
process  and  get  funded  within  a   easy. respective  lenders.
week.
P2P Proposition
For Lender

Better Returns Secured Transaction Transparency

By  connecting  you  directly  with   Every  fund  movement  is  handled   Disclosure  of  borrower’s  credit  
borrowers,  you  earn  full  amount   by  our  reputable  bank  partner  to   information  to  allows  lenders  to  
of  interest  paid  by  borrowers. ensure  peace  of  mind  in   make  informed  lending  decision.
transacting  through  us.
 Borrowers  request  loans  online,  get  approved,  and  offered  to  
investors  as  loan  requests  in  the  marketplace.
pieces  of  these  loans  (i.e crowdfund),  much  like  how  consumers  buy  
products  and  goods  online  in  e-­commerce  website.  Individuals  and  
businesses  can  then  “buy”  or  invest  in  
as Marketplace
LENDER BORROWER
All  loan  transactions  
Individuals Individuals

Loans
Repayment

Institutionals SME

Repayment Loans

Cash  Management  Bank

P2P Lending Future Risk Ecosystem

Pemberian Informasi

Pertukaran Informasi
kredit
Financial  
Institutions

Pertukaran Informasi
kredit

Biro  Kredit

Perjanjian Perjanjian

Borrower Lender
Mengasuransikan
Pinjaman

Asuransi

Memberi Pinjaman Menerima Pinjaman

Bank
Sample Demographics ‒ P2P Users
BORROWER

SME Consumer
• Avg Sales  IDR  15  bio  per  year • Avg age  25  years  old
• Avg 3  yrs established • Avg 2  years  employment
• Avg #  employees  25 • Avg salary  IDR  7  mio
• Services  based  industry • Avg loan  IDR  10  mio

Overall Portfolio by Industry Loan Purpose

2.60%
3.40%

Creative Perbaikan Rumah 7%

6.70%
FNB
29% Pendidikan 8%
Outsourcing
IT Services Modal Usaha 40%
7%
Telecommunication 9%
Liburan dan Travel
Logistics
Construction Interior Design 8% Biaya Pengobatan
Construction 11%
14% Kendaraan Bermotor
8%
CME
Engineering 13% Lainnya 16%
Sample Demographics ‒ P2P Users
LENDER

Nationwide
• Age 21-74
• Avg age 33 years old
• 80% : 20%, Male : Female

Gender Age 1% Lender Distribution

3%
18 - 25 26 - 35 35 - 45 4%
Male Female 5%
46 - 50 > 60
DKI Jakarta
9%
20% 17% Tangerang 6%

Bekasi
21%
Depok
9%
Bandung
Surabaya 51%
80% 52%
Others
“
P2P  has  become  a  simple  and  
quick  funding  solution  with  
competitive  return.  Really  a  good  
alternative  investment “
LENDER

Head  of  Retail  Product  Development

Middle  East  Bank  in  Indonesia
“
P2P  is  our  cash  flow  savior.  Quick  
“
and  easy,  only  need  2  days  for  
disbursement.

BORROWER
Domestic  logistic  company