Targeting to Profit, KoinWorks Focuses on MSMEs in 2021

KoinWorks launched three products related to investment and salary this year. This financial technology startup (fintech lending) plans to release new services targeting Micro, Small, and Medium Enterprises (MSMEs) in 2021.

The three products launched this year are KoinGold gold investment, KoinBond bonds, and KoinGaji salary payments. The company is targeting profit in 2020 through these three services. However, this target was not achieved due to the corona pandemic.

“To be profitable next year, we plan to launch several products,” said Chief Operating Officer of KoinWorks Bernard Arifin in the Online Media KOINversation Small Group Interview, Monday (21/12). The new product will focus on targeting MSMEs. However, Bernard was reluctant to elaborate on the service.

He only said that the MSME sector had the potential to be worked on during the Covid-19 pandemic. This is because the government encourages small and medium businesses to explore digital services. The Ministry of Communication and Informatics (Kominfo) noted that 2.7 million MSMEs digitized their businesses from May 14 to October 15 or exceeded the target.

In total, nearly 11 million MSMEs in the archipelago have gone digital. On the one hand, Indonesia has more than 64 million MSMEs. Therefore, the potential is considered very large. “We are fixing user service to make it easier and faster. We also assess that to support MSMEs not only in terms of transactions but also loyalty,” said Bernard.

KoinWorks Achievements during 2020

On that occasion, he also conveyed the achievements of KoinWorks this year. The number of borrowers (borrowers) and lenders (lenders) increased 61% on an annual basis (year on year / yoy) to more than 549 thousand.

Since the beginning of the year, this fintech lending has distributed more than IDR 2.5 trillion in loans. The average credit is around IDR 200 billion to IDR 300 billion per month. He is optimistic that the distribution of financing will increase next year even though there is still a coronavirus outbreak.

“The positive performance of the KoinWorks portfolio during the pandemic provides optimism for the greater potential for growth in the industry in 2021,” he said. Previously, KoinWorks Co-founder and CEO, Benedicto Haryono was also optimistic that the company’s revenue will grow five times yoy next year.

Meanwhile, lending is targeted to increase three to four times. He is also confident that he can make a profit in 2021. Although new credit disbursement is around 30-40% compared to pre-pandemic.

“We are quite happy with the progress achieved, although in terms of the loan portfolio there is a decline,” he said last November (19/11). From a business perspective, financing services or peer to peer lending (P2P) contributed the most.

Meanwhile, for other services, such as gold investment or KoinGold, transactions grew by more than 300% to IDR 2 billion per month in the third quarter. Then, the disbursement of salary through KoinGaji reaches IDR 150 million every month. The average value is IDR 3 million to IDR 10 million per employee.

Aims to Rise in 2021

Going forward, KoinWorks through KoinP2P will continue to make adjustments to the credit scoring system through machine learning innovations, so that it can be more agile & robust, as well as adjust to the current economic & business conditions.

Bernard guarantees that in order to maintain loan quality, KoinWorks through its product KoinP2P actively applies the Prudential Principles or the principle of prudence in seeing the risks of each SME applying for a loan.

Only about 10 percent of the loan portfolio at KoinP2P had to receive assistance in the form of a loan restructuring program in this pandemic. KoinWorks is also optimistic that 70-85 percent of these borrowers can immediately get up and recover at the end of 2020 to early 2021.