Speakers of the Zilingo Business Forum, from left: Gungun Rachgunadi, Bernard Arifin, Indra Rukman and Ade Yuanda Saragih. (JG Photo/Jayanty Nada Shofa)

P2P Lending Eases SME's Most Pressing Challenge of Capital


NOVEMBER 29, 2019

Jakarta. In the rising Industry 4.0, peer-to-peer lending, also known as P2P, should be part of the game plan for small and medium enterprises to ease their way in securing investments.

This point was raised at the Zilingo Business Forum in Jakarta on Thursday in response to the existing low credit disbursement in the SME sector.

The Financial Services Authority, or OJK, reported that only 18.3 percent of the total loans issued by banks were granted due to SMEs’ inability to provide sufficient financial reports.

To give insight on the matter, fashion e-commerce Zilingo held a business forum with the theme "Securing Loans for Your Business in the Digital Era" alongside P2P lending platform KoinWorks, the Indonesian Young Entrepreneurs Association (HIPMI) and garment manufacturer Sigma Global Taxindo.

Jakarta's HIPMI chairman Indra Rukman said that 70 percent of its members comprise of SMEs whose most pressing challenge is the lack of access to working capital.

However, this can be solved by tapping into fintech that has revolutionized and simplified the once complex lending process.

For instance, collateral requirement at traditional banks has been the biggest hurdle for starting entrepreneurs as it must be under the borrower's name. This was experienced by Gungun Rachgunadi, co-founder and garment manager for Sigma Global Taxindo, whose former lack of collateral prevented him from procuring raw materials.

Fortunately, such requirement is omitted in P2P lending.

"As a P2P platform, we are mostly focusing on non-collateral business loans. We would like to grow together with SMEs in helping them to add their stocks and expanding their business. So, we'd rather focus on assessing these loans based on the borrower's character or credit history," Bernard Arifin, chief operating officer for KoinWorks, said.

In addition, Ade Yuanda Saragih, vice president and country head for Zilingo, highlighted the SMEs should take advantage of the emerging digital platforms.

"We seek to give equal opportunities for merchants regardless of their size. We hope that these SMEs do not hesitate to use the countless digital platforms and our business solutions such as P2P lending and procurement of raw materials for them to grow in the Industry 4.0," he said.