The COVID-19 Pandemic and Indonesia’s Fintech Markets

Eric Alexander Sugandi
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Eric Alexander Sugandi: Asian Development Bank Institute

No 1281, ADBI Working Papers from Asian Development Bank Institute

Abstract: We investigate the impacts of the COVID-19 pandemic and the large-scale social distancing (PSBB) policy on Indonesia’s financial technology (fintech) markets. We also elaborate on the roles fintech companies can play in the national economic recovery. We find that Indonesia’s fintech markets were relatively resilient during the COVID-19 pandemic. The pandemic did not have significant impacts on Indonesia’s fintech markets, but the PSBB harmed phone banking, mobile banking, and internet banking transaction values as well as peer-to-peer (P2P) fintech lending. Nevertheless, the PSBB increased electronic money transactions. The relatively short PSBB period prevented the restrictions on economic activities from imposing too much damage on the fintech markets. The Indonesian authorities involved the fintech industry as a component of the national economic recovery program (PEN), particularly the pre-employment card (Kartu Prakerja) program. There are still many areas in which the government can utilize the fintech industry for economic recovery, including direct cash transfers to poor households and extensions of subsidized loans for micro, small, and medium-sized enterprises (MSMEs).

Keywords: fintech; Indonesia; MSMEs (search for similar items in EconPapers)
JEL-codes: G23 G29 O33 O39 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2021-08
New Economics Papers: this item is included in nep-ict, nep-isf, nep-pay and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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