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KoinWorks on economic empowerment and job creation in Indonesia

Published on February 23, 2023


What are the biggest challenges facing Indonesian startup KoinWorks in delivering social impact via financial inclusion? How can providing Indonesia’s 64 million MSMEs access to working capital also help the archipelago’s consumers?

These are a few of the topics touched on in a recent in-depth discussion between Lauren Blasco, Head of ESG at AC Ventures, and Angelique Timmer, SVP of Impact and ESG at KoinWorks.

Launched back in 2017, KoinWorks provides loans and credit card access to MSMEs as the core of the Indonesian economy. The startup is also branching out to serve non-financial needs with an online community for businesses and various educational modules. Here are some excerpts of the conversation between Lauren and Angelique on the Indonesia Digital Deconstructed podcast. 

KoinWorks on Indonesian fintech and economic empowerment

The transcript below has been condensed and edited for focus and clarity.

Lauren: KoinWorks has developed several sustainable development goals. Do you see any specific challenges on the implementation side?

Angelique: One of them, I think, is to have a common understanding of what we mean by ESG and impact. As I see it, ESG is basically an assessment tool for your organization that helps you to identify the red flags, but also the business opportunities. So, to my way of thinking, ESG is more like looking backward to gather important input for your impact strategy going forward.

What we’re doing right now is defining an impact ambition, setting precisely what constitutes positive impact, and then spelling out operating principles that help us to reach our sustainable development goals over the next year.

Another challenge from an impact angle, I think, is getting aligned on the goals with our multiple stakeholders. We have the investor stakeholders, we have the team member or employee stakeholders, we have the regulators, and most importantly, we have our customers as stakeholders. So we must all speak the same language.

We do talk to institutional investors, but KoinWorks is funded by retail investors, who are Indonesian millennials contributing significantly with their hearts in the right place to support our MSMEs in getting access to financing for their businesses.

Lauren: Can you explain to our audience how KoinWorks drives things like job creation in Indonesia? How does KoinWorks benefit both businesses and consumers alike?

Angelique: About 70% of our borrowers receive their first-ever productivity loan with us, and that loan helps them to expand their business to have more stores and more branches, and this will eventually lead to job creation.

To make this very concrete, within one year after disbursement or receiving their loan, they’re showing in general a 43% increase in revenue. An average micro business has between one and four employees. So with just that on the back of an envelope, you can indeed make a rough calculation about how many jobs we’re actually contributing to Indonesian society. 

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See also: How KoinWorks scales societal impact across Indonesia
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