If we look at the development of the financial industry in Indonesia, the index of consumer income and earnings increased every month. This shows the success of the economic improvement of the country, which also resulted in a better turnover. The fintech especially in digital financing is now increasingly widespread, as the economic growth of the people in productive age, or more commonly known as millennials.
Millenials and the Purchasing Power
We have already discussed how millennials dominate the market in our previous blog article. Millennials who are in the productive age, have sufficient income, and very active in the digital technology, especially social media, has a very great interest to the latest technologies. For example, mobile gadget or a motor vehicle. By having the latest gadgets (mobile phones, laptops, flat screen HDTV, etc) will provide more value to them. In addition of supporting tool of everyday life, these gadgets are also showing their prestige. The price of expensive gadgets would not deter millennials to achieve what they want. This is also admitted in an interview by one of our valuable client Reebonz, a luxury e-commerce platform operating in Indonesia.
The same thing goes with motor vehicles. Considering the public transport infrastructure in Indonesia is still inadequate, most of the middle class in these countries prefer to have their own vehicle. Apart from being a means of a more convenient personal transportation, it also demonstrates their success rate in the economy. In urban areas, private vehicles became the benchmark for the middle class people to show their level of wellbeing. While in rural areas, private vehicles became the main alternative to travel, because of the lack of public facilities.
Why Credit Service is Essential
To purchase these items, of course, they will need an adequate capital. Given the recent income levels of the society, even though it has increased, but remained low compared to other Asian countries. But that does not mean middle-class society can not equip themselves with gadgets and vehicles as they wish. A system of credits and loans from banks and financial services have helped them to be able to buy items they needed and desired.
Therefore it is not surprising to see financial services is growing rapidly in Indonesia. The credit/loan service is booming, and almost all kinds of goods can be bought on credit system. Requirements to get loans are getting easier, though still within the limits of government regulation. This should be a concern of the financial services provider to grow their business.
From Conventional Service to Digital Finance Application
In addition to conventional financial services (banks, personal loans agencies), financial services are now also starting to break into the digital field. Given the high millennials’ attention in digital technology, particularly the use of the Internet and mobile devices, fintech in Indonesia is now having a huge opportunity to grow. As a software company, we at WGS has handled various fintech applications and softwares that could be useful for the development of financial service. This digital application facilitates financial institutions to grab more market share, and is also easier for people to obtain financing on the desired goods.
The emerging of lending management application can certainly trigger the growth of financing in Indonesia. If there are more financial institutions adopting this digital system, then it would reach wider range of society. As a company that helps to foster this fintech, WGS will be happy to help your company to develop appropriate lending application to suit your market.