Indonesia experiences 6-fold growth in fintech players over past decade

Indonesia’s fintech sector is booming with 600 percent growth in fintech players over the past decades, according to a report by AC Ventures (ACV) and Boston Consulting Group (BCG).

The growth was primarily driven by the paymens segment which had more than 60 million active users as of 2020 and an expected CAGR of more than 20 percent until 2025.

Titled “Indonesia’s Fintech Industry is Ready to Rise”, the report charts the progress of fintech in the country across multiple sub-verticals, starting from the inception of fintech startups and the local digital economy in 2011 to 2022.

New players in segments such as software as a service (SaaS) and insurance activities are emerging, indicating that fintech in Indonesia is maturing and moving towards more sophisticated products and services.

In the lending space, there were more than 30 million active peer-to-peer borrower accounts in 2021. The wealth segment had over nine million retail investors in 2022.

The adoption of SaaS platforms is also growing, with six million SMEs currently using them, representing a 26-fold expansion over the preceding three years.

While lending and payments remain important, there is increasing investment into wealthtech, insurtech and fintech SaaS.

“The exponential rise in the number of fintech players, burgeoning customer engagement, and escalating equity funding are all indicative of the sector’s vast potential. Our investment strategy aligns with this space’s most impactful and innovative enterprises,” said Adrian Li, Founder and Managing Partner of ACV.

“It’s an exciting time for innovation led by customer needs, collaboration between fintech players and traditional financial institutions, regulatory bodies, and regulatory foresight. We hope our insights will equip industry players with a deeper understanding of the fintech ecosystem, putting them in a stronger position to seize new opportunities and gain competitive advantage,” said Sumit Kumar, Managing Director and Partner og BCG.

Photo: Tom Fisk

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