The COVID-19 Pandemic and Indonesia’s Fintech Markets

25 Pages Posted: 3 Sep 2021

See all articles by Eric Alexander Sugandi

Eric Alexander Sugandi

Asian Development Bank Institute; World Health Organization (WHO) - United Nations Office for Project Services (UNOPS)

Date Written: August 31, 2021

Abstract

This paper investigates the impacts of the COVID-19 pandemic and the large-scale social distancing (PSBB) policy on Indonesia’s financial technology (fintech) markets. It also elaborates the roles that fintech companies can play in the national economic recovery.

This paper finds that Indonesia’s fintech markets were relatively resilient during the COVID-19 pandemic. The pandemic did not have significant impacts on Indonesia’s fintech markets, but the PSBB harmed phone banking, mobile banking, and internet banking transaction values as well as peer-to-peer (P2P) fintech lending. Nevertheless, the PSBB increased electronic money transactions. The relatively short PSBB period prevented the restrictions on economic activities from imposing too much damage on the fintech markets.

The Indonesian authorities involved the fintech industry as a component of the national economic recovery program (PEN), particularly the pre-employment card (Kartu Prakerja) program. There are still many areas in which the government can utilize the fintech industry for economic recovery, including direct cash transfers to poor households and extensions of subsidized loans for micro, small, and medium enterprises (MSMEs).

Keywords: fintech, Indonesia, micro, small, and medium-sized enterprises, MSMEs

JEL Classification: G23, G29, O33, O39

Suggested Citation

Sugandi, Eric Alexander, The COVID-19 Pandemic and Indonesia’s Fintech Markets (August 31, 2021). Available at SSRN: https://ssrn.com/abstract=3916514 or http://dx.doi.org/10.2139/ssrn.3916514

Eric Alexander Sugandi (Contact Author)

Asian Development Bank Institute ( email )

Kasumigaseki Building 8F
3-2-5, Kasumigaseki, Chiyoda-ku
Tokyo, 100-6008
Japan
+81-3-3593-5518 (Phone)
+81--3593-5571 (Fax)

HOME PAGE: http://https://www.adb.org/adbi/about/staff-profiles/eria-sugandi

World Health Organization (WHO) - United Nations Office for Project Services (UNOPS) ( email )

Avenue Appia 20
Geneva 27, 1211
Switzerland

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
224
Abstract Views
1,399
Rank
247,469
PlumX Metrics