Fintech can help boost Indonesia’s creative sector: BEKRAF

Logo. Photo by BEKRAF

As Indonesia continues to look for ways it can expand the creative sector and turn it into synergies with the country’s first digital boom. The new wave of rising fintech startups might just be the answer.

Ever since Indonesian president Joko ‘Jokowi’ Widodo took office in 2014, he has pledged to revitalize the country’s creative industry, aiming to obtain 12 per cent of GDP from the sector this year. In 2014, creative industry contributed more than 7.5 percent to the country’s GDP, provided jobs for 11.8 million workers and created more than 5 million new business units.

To prove his commitment, President Jokowi created the Indonesian Creative Economy Agency, or locally known as Badan Ekonomi Kreatif (BEKRAF). Since then, BEKRAF has established partnerships with financial institutions – both conventional and tech based – to help more businesses get access to finance.

“Fintech startups could significantly help us because most of these creative businesses don’t have the track records needed to go to banks,” said Prabowo, head of venture capital sub-directorate at BEKRAF, in an interaction with DEALSTREETASIA recently.

There are 16 sub-sectors of creative businesses listed on BEKRAF. They are apps and game development, architecture, interior design, visual communication design, product design, fashion, film, video and animation, photography, handicrafts, culinary, music, publishing, advertising, performance art, visual arts, and television and radio.

These businesses make up the largest target market for fintech companies, such as peer-to-peer (P2P0 lending startup Investree. In its latest report, almost 40 per cent of Investree’s disbursed loans have gone to the creative sector.

CEO and Founder of Investree Adrian Gunadi said his company aims to disburse up to Rp 100 billion ($7.7 million) in loans by mid 2017. Businesses in the creative economy sector are predicted to remain the largest applicant for loans.

“Creative industry’s portion will still be above 30 per cent. We are hoping to help them develop good track record in P2P lending platforms so they can later borrow from banks,” said Adrian.

In June, BEKRAF spokeswoman Hanifah said the agency has partnered with several venture capital firms to provide funding for 16 sub-sectors in the creative industry.

The VCs include Kinara, Fenox Venture Capital, Mandiri Capital Indonesia, and Astra Venture, among others. “However, we are still compiling the data on how much they are willing to invest,” said Hanifah.

In a visit to Silicon Valley earlier this year, Indonesia President Joko Widodo delivered an ambitious speech where he presented the dream of becoming Asia’s ‘digital economy engine’.

Still in a bid to realize this dream, the Indonesian government has said that it was looking at a new regulation that would allow the inception of a micro VC firm with lower capital requirement compared to a regular VC.

The government also plans to provide more tax incentives for startups and small businesses in a bid to encourage entrepreneurship in the country, create new jobs and increase purchasing power.

Also Read:

Indonesia: BEKRAF, VCs team up to fund creative sectors, DAM expands network

Indonesian regulator to introduce micro VCs, other incentives to boost startup ecosystem

Indonesia: Startups to get $76m in government’s micro-credit guarantee program

After e-commerce, Indonesia may allow FDI in cinema exhibition business

 

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.