Lamseen – The Indonesian Fintech Lending Association (AFPI) successfully hosted the AFPI CEO Forum 2024 with the theme “Navigating Indonesia’s Post-Election Wave” at the Pullman Thamrin Jakarta. The event saw the participation of CEOs from AFPI’s fintech lending members, regulatory officials, government ministries, agencies, and financial industry experts.
Held on August 6, 2024, the AFPI CEO Forum 2024 provided a platform for fintech lending industry players to discuss upcoming challenges and opportunities. The forum emphasized the need for adaptation to the rapidly changing market dynamics. A key focus was the collective commitment to combat illegal online lending practices and to enhance public financial literacy.
Demonstrating its role as an alternative funding solution, AFPI showcased fintech lending beneficiaries at the forum. Products on display ranged from snacks and handicrafts to apparel, presented at the booth #FintechLendingForUMKM. These SMEs have benefited from the funding provided through fintech lending, aiding in their business development.
The role of regulators in maintaining the stability of the digital financial ecosystem was a major highlight of the forum. Agusman, Head of the Financial Services Authority’s (OJK) Executive Board for Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Services Institutions, delivered a keynote address outlining future regulatory policies. He emphasized that fintech lending holds significant growth potential.
“According to the mandate of the P2SK Law, we need to strengthen various aspects, including governance improvements and enhanced consumer protection,” Agusman stated in his speech.
Agusman further discussed OJK’s support for the industry in finding new branding to distinguish between negative connotations often associated with online loans and those that genuinely contribute to the economy. Particularly for individuals with limited access to lending.
“Fintech lending has experienced a 26% year-over-year growth, making it one of the fastest-growing financial institutions in the country. With a maintained NPL ratio of 2.7%, we are confident that this reflects the hard work of industry players to ensure the long-term sustainability of the sector,” he added.
Dr. Chatib Basri, former Minister of Finance (2013-2014) and AFPI Advisory Board member, also addressed the forum virtually. He provided insights from three perspectives: global economic conditions, their impact on Indonesia’s economy, and the post-election economic scenario in Indonesia.
“We may face relatively high interest rates through the end of the year, which will impact the fintech industry. In such conditions, the cost of funds will be relatively high. Fintech companies must adopt strategies for profitability,” Chatib noted.
Chatib highlighted that despite global economic turbulence, Indonesia’s economy remains resilient, with a growth forecast of around 5% for 2024.
“India, with its large population and vibrant democracy, has shown how technology can become an integral part of daily life. In this context, AFPI’s role is crucial in enhancing productivity and promoting financial inclusion,” he added.
In his keynote address, Prof. Yusril Ihza Mahendra, former State Secretary (2004-2007) and Chairman of Prabowo-Gibran’s legal team. Discussed the legal framework supporting the growth of the fintech industry in Indonesia.
“The rapid advancement of technology significantly impacts economic activities. However, our pace in regulating and anticipating these changes with legal norms is often lagging. Legislative processes are lengthy and slow,” Yusril commented.
He expressed hope that the newly elected President would make breakthroughs in bureaucracy. And also legal reforms, which would significantly support economic growth.
“There is still a general lack of understanding among the public about fintech activities. Leading to confusion between fintech and online loans. This issue needs to be addressed by the upcoming government to create flexible regulations that cover new economic activities, including fintech,” Yusril concluded.
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