Let’s Work Together


KoinWorks: the neobank championing Indonesia’s SMEs

Published on October 9, 2023

In an age when two-thirds of Indonesian SMEs are left in the financial dark, one company emerges as a beacon of hope, redefining access to financing and challenging traditional banking norms.

On a recent episode of Indonesia Digital Deconstructed by AC Ventures, Ben Haryono, Co-founder and CEO of KoinWorks, one of Indonesia’s largest fintech SME lenders, spoke with  Adrian Li⁠ and Leighton Cosseboom about the prospects of the local fintech landscape, and what makes KoinWorks special.

Redefining access to financing 

The number of fintech players in Indonesia has increased six-fold over the last decade, rising from just 51 active players in 2011 to 334 in 2022. Lending has been a big part of this sector’s growth story. Ben co-founded KoinWorks in 2016 with the aim of empowering entrepreneurs across the nation, helping them to expand their businesses and achieve their financial goals. 

Originally a peer-to-peer lending platform, KoinWorks launched a website through which SMEs could submit simple loan applications. Initially, the startup exclusively served e-merchants. But over time, it expanded to include other industries, including brands in fast-moving consumer goods, distribution, and more. 

Unlike incumbent banks, KoinWorks does not require collateral. This is a significant advantage for borrowers, many of whom would otherwise be turned away by formal financial institutions. 

Adrian emphasized that without the need for collateral, even banks have approached the platform to secure financing.

Indonesia is one of the world’s largest economies, with over 64 million micro, small, and medium-sized enterprises. While having access to a bank account is taken for granted in markets like Europe or the US, roughly two-thirds of SMEs in Indonesia lack access to the formal financial sector. As such, obtaining any sort of credit line can be challenging, to say the least, for small teams and freelancers.

As a solution, KoinWorks launched a neobank feature that enables SMEs to open a business banking account directly through its app, which now boasts over 2.5 million users. As the company scaled, the volume of customer queries increased as well – especially between 2021 and 2022, when the customer support team handled close to 28,000 queries across multiple channels.

Emerging markets 

Adrian pointed out that Indonesia presents fascinating opportunities in fintech, although there are also various challenges. He specified that in other countries like China, fintech has not always lived up to the high expectations. “Certain business models that achieved scale in more developed markets were overhyped,” he said, going on to mention that an unfavorable regulatory environment in China continues to be a major obstacle.

Fortunately, this is not the case in Indonesia, where the government aims to create supportive regulations. “Financial services are an important and large component of the overall economy; this is one of the sectors where we continue to believe there will be opportunities to innovate and support founders,” he explained.

Investment in fintech in Indonesia from 2020 to 2022 reached US$3.2 billion, 4.6 times the funding seen in the period from 2017 to 2019, demonstrating strong investor commitment, according to a recent fintech report by AC Ventures and Boston Consulting Group. Among these funds, 60% has flowed to early-stage companies.

Simultaneously, consumer interest and engagement continue to grow. Ben said that in the lending segment, people tend to adopt new solutions relatively quickly because obtaining financing is a priority for them. On the other hand, Indonesians do struggle, in general, when it comes to the adoption of other types of apps. As such, KoinWorks’ priority is not only to make its app simple and user-friendly but also to offer a quick return on investment.

All in one place

KoinWorks’ mobile app offers features to assist users in managing their finances on the go, including loan details, loan history, and financial reports. The company refers to this approach as “all in one place.”

Through the app, lenders can issue loans to individuals and businesses, and KoinWorks will automatically distribute repayments. Borrowers undergo a simple application process, secure a loan, and make monthly installments. In 2022, KoinWorks introduced an ‘Instant Approval’ feature to expedite credit requests filed by SME owners. With this feature, entrepreneurs can gain access to funds within three to five working days.

KoinWorks also provides users with the option to link their accounts with their banks. This streamlines the assessment process for users requesting a financing facility.

Get the full episode for free on Spotify, Apple, and Google.