Education Fintech Attracts MSMEs & Job Vacancies to Reduce Bad Credit

Students and university students have also been affected by the corona pandemic. To reduce bad credit, financial technology companies (fintech lending) specifically for education, Pintek, and Cicil, have also hooked up Micro, Small and Medium Enterprises (MSMEs) to create job vacancy features.

Pintek chose to penetrate the MSME sector amid the Covid-19 pandemic. However, the targeted business actors are still related to education, such as providers of goods and services in the School Procurement Information System (SIPLah).

This system was created by the government to coordinate School Operational Assistance (BOS) funds in the procurement of school goods and services such as books, uniforms, electronic goods, and others. “The loan is provided to optimize capital (UMKM),” said the Co-Founder and President Director of Pintek Tommy Yuwono in a press release, Thursday (21/1).

This expansion of financing is to increase transactions, but still minimize credit risk. Previously, Tommy said that the risk of financing students, university students and educational institutions was quite high because it was consumptive and there was no guarantee.

During the outbreak of the coronavirus, the risk increases because the income of some people decreases. As a result of this condition, the need for funding for education increases. Pintek noted that the demand for loans in this sector increased 10 times as of July 2020 compared to 2019.

As for MSMEs, fintech can share data in the context of credit risk analysis through the fintech lending data center. Spokesperson for the Indonesian Funding Fintech Association (AFPI) Andi Taufan Garuda Putra said the system was adjusted to the current performance of MSMEs.

“The system moves dynamically, adjusting the profile of borrowers, who are mostly MSMEs,” said Andi, Thursday (21/1). That way, fintech can anticipate the risk of bad credit.

Business Optimistic Shortcut Will Increase in 2021

The P2P lending fintech organizer PT Pinduit Teknologi Indonesia (Pintek) is optimistic that the lending and borrowing business in the education sector in 2021 will be increasingly successful. Pintek Co-Founder and Managing Director, Tommy Yuwono, projects that this year’s loan could reach IDR 400 billion.

This value is an increase compared to the distribution realization until 2020 of IDR 100 billion. In order to achieve this target, Pintek will focus more on B2B financing, which targets both schools and school supplies.

“Previously, we had run student loan products. However, during the pandemic there were new problems, where schools had to make the digital transformation, especially the need for gadgets. Meanwhile, schools have difficulty meeting the funds for this purpose, so we bail them out first,” said Tommy virtually.

He explained, Pintek provides invoice loans to vendors who are connected to the Ministry of Education and Culture’s Platform for Procurement Information Systems (SIPlah). This loan uses project invoices issued or POs received from school partners.

When the school pays to the vendor, the vendor can return the loan to Pintek. Tommy said that this loan grew along with the digital transformation in schools during the pandemic. He stated that this product has contributed around 60% of the total Pintek portfolio.

Cicil Jobs, a new feature of Fintech Cicil

Another educational fintech, Cicil, chose to launch the Installment Jobs feature last year. Student borrowers can apply for jobs as survey workers though this feature, MSME reviewers to influencers. The company launched the Cicil Jobs feature to improve students’ ability to pay.

Borrowers can search and apply for jobs through this brand-new feature. Co-Founder and CEO of Cicil Edward Widjonarko said the strategy was carried out, because the ability of student borrowers to pay installments decreased during the corona pandemic.

The success rate of loan repayment is a maximum of 90 days after maturity or TKB 90 reaches 97.22% as of September 2020. Non-performing loans (NPL) Cicil also increase to 1% during this period. “We must be responsible. Not only to students, but also to lenders,” said Edward during a virtual press conference, September last year (11/9/2020).