Indonesia’s ministry of cooperatives and SMEs has announced plans to set up a crowdfunding platform to fund startups as part of its broader e-commerce roadmap introduced earlier this month.
The government will join hands with the University of Indonesia (UI) to build the site.
Ministry spokesperson Braman Setyo said, the government will act as a facilitator connecting investors and users. The platform, which will be free to use, is not intended for generating profits. The various stakeholders including financial services authority (OJK), Bank Indonesia (BI), and the ministry of communications and information technology will work on the regulations for the platform.
“The platform is expected to launch next year. We hope that the crowdfunding site can help minimise costs for those looking for investments,” Setyo told local reporters in Jakarta recently.
While Indonesia has southeast Asia’s highest number of startups, it also faces a big gap in funding. To address this, President Joko ‘Jokowi’ Widodo rolled out the 14th economic reform package including a presidential decree on e-commerce roadmap.
Crowdfunding was one of the six solutions put forward in the roadmap, along with micro credit programmes for app developers, grants for business incubators, universal service obligation (USO) funds for digital-based SMEs, angel investment, and seed capital from VC firms.
Other provisions regulated in the roadmap include taxation, consumer protection, education and human resources, logistics, and cyber security. There are at least 18 initiatives that have to be completed in the next three to six months with 13 more initiatives to be completed within 12 months.
The government is targeting to complete the first and second list by mid-2018 in order to achieve the forecast e-commerce transaction value of $130 billion by 2020. Regarding tax, the government will lower the rate for local investors investing in startups, and ease procedures foe e-commerce ventures with a total turnover of Rp 4.8 billion ($357,000) and below per year.
According to the ministry of communication and information, the value of Indonesia’s e-commerce transactions is forecast to hit $130 billion in 2020. Indonesia is also targeting to nurture 1,000 technopreneurs with a total business valuation of $10 billion by the same year.