Photo for illustrative purposes only. A person counting a wad of Indonesian rupiah notes. Herwin Bahar/Shutterstock

Islamic Finance

Indonesia’s Islamic fintechs disbursed five times more financing in 2019 - industry body

JAKARTA – Indonesia’s Shariah-compliant fintechs posted solid growth in 2019, disbursing five times more financing on average to reach nearly 1 trillion rupiah ($72.66 million) combined, Ronald Yusuf Wijaya, chairperson of the Indonesia Syariah Fintech Association (AFSI) told Salaam Gateway.

Official numbers for the whole of 2019 are not yet available from the Financial Services Authority (OJK) but total fintech conventional and Islamic lending up to November 30 was 74.54 trillion rupiah ($5.44 billion) from around 20 trillion rupiah in 2018, according to the authority.

In the Islamic sector, the five platforms with the highest growth financing volume, out of 12 licensed entities, are Dana Syariah, Ammana, Alami, Investree Syariah, Ethis Crowd and Kapital Boost, Ronald said.

Dana Syariah disbursed 305 billion rupiah, Investree Syariah channelled 240 billion rupiah, Kapital Boost 109 billion rupiah, Ethis Crowd 106 billion rupiah, Alami 70 billion rupiah, and Ammana 13 billion rupiah, according to Ronald.

“The industry [Islamic lending platforms] grew significantly in 2019, around four to five times, the highest level in recent years,” said Ronald.

“I think Ammana, Dana Syariah and Alami are the biggest gainers,” he said.

Ronald attributes the high growth last year to increased awareness of Islamic financing platforms, especially among millennials and university students.

“Also, since more and more illegal cash loan entities popped up, people started to look for alternatives to conventional P2P, and this was a positive for us,” he said.

As of October 2019 OJK’s Investment Alert Task Force blocked 1,073 unlicensed and illegal online lending companies. The rampant nature of illegal online lenders has turned consumers to officially licensed platforms.

Ronald, who is also CEO of real estate crowdfunder Ethis Crowd said the platform benefited from gaining an official license to operate from the Financial Services Authority (OJK) in November. He said that prior to the license, investors, who were around 98% foreign, were putting in 5 million rupiah to 10 million rupiah on average. Investor confidence in the now-licensed entity has pushed up investments to around 100 million rupiah on average, with more local investors joining in.


Ronald is projecting 2-3 trillion rupiah in financing disbursed by Shariah-compliant platforms this year.

He believes that several factors will contribute to this, including collaborations between new platforms and existing players, more Shariah-compliant payment gateways to enter the market, and more institutional investors seeking Islamic investments. 

“We are quite optimistic about 2020,” said Ronald, adding that industry players would need to keep on raising awareness of their platforms among Indonesians.

Ronald’s optimism aligns with the findings of a global study released in December by UK-based Elipses in collaboration with the UK Islamic Fintech Panel, that said Southeast Asian countries, particularly Indonesia, are expected to provide the highest growth potential in 2020 for Islamic fintech.

“In the long run we can catch up with conventional P2P. Once institutional investors start collaborating with us, we can grow exponentially,” Ronald added, although he is realistic that this remains in the far horizon as conventional lending platforms disbursed around 70 trillion rupiah in loans from 2016 to 2019.

New platforms from among the AFSI’s 45 members that will obtain their OJK license this year could include Asy Syirkah and Urun Modal, according to Ronald.

Last year, Asy Syirkah disbursed 100 billion rupiah and Urun Modal 45 billion rupiah, in financing, according to AFSI.

Other association members, including BitLand, Goolive, HalalVestor, Invesproperti, Mobilima, One Shaf, Provesty, and Zahir are also in the process of registering as digital financial platforms with the OJK.  

There were 164 registered conventional and Islamic fintech platforms in 2019, 25 of which were licensed, according to OJK data. These include 12 licensed Shariah-compliant financing platforms.

($1 = 13,761 Indonesian rupiah)

(Reporting by Yosi Winosa; Editing by Emmy Abdul Alim

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