Indonesia Gains Momentum to Leverage Investments in Fintech: Association

Jakarta. Indonesia is gaining momentum to attract global investment in the financial sector due to the country’s success in last year’s G20 presidency, but much needs to be done to ensure the money flows in, a fintech executive said at a recent seminar.

Major investors, primarily from Southeast Asia, have expressed interest in expanding operations in Indonesia, but the country needs “favorable and responsive” policies immediately to take advantage of the opportunities, said Pandu Patria Sjahrir, chairman of the Indonesian Fintech Association, or AFTECH.

Pandu said the Employees Provident Fund, a state-run pension fund in Malaysia, recently expressed its interest in increasing investment in Indonesia.

– Around ten people visited us and talked only about Indonesia. They plan to increase investment in both public markets such as the Indonesia Stock Exchange and the private market as well, Pandu said during the 2023 Economic Outlook seminar hosted by B-Universe Media Holdings in Jakarta on Tuesday.

Apart from that, the Sovereign Wealth Fund of Brunei also plans to channel funds from China and Europe to Indonesia, he added without elaborating.

“So now our task is to come and get it, put it in the capital market,” Pandu said.

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IDX is also set to host the largest IPO in Southeast Asia by an oil company in the near future, he added.

“It’s a new momentum for us to compete and make it as easy as possible for them to invest,” he said.

Pandu echoed the recent warning by President Joko Widodo about unethical business behavior and investment scams harming the business climate.

He pointed to the investment fraud scandal in the financing of the Indosurya cooperative that cost investors trillions of rupiah, but its executives were cleared of all criminal charges with the court arguing that it is more of a civil case.

“For me, financial crime is even worse than love crime, because it hurts the sentiment of many more people,” Pandu said.

Pandu said AFTECH is currently shifting its focus from encouraging investment to help boost economic growth to promoting caution amid rising cases of fraud by fintech companies.

“We have revoked the membership of a number of companies that have automatically revoked their permission from the OJK [Financial Service Authority]. Ultimately, this is our duty and responsibility to assist OJK’s supervisory role in the financial market, said Pandu.