IDNEWSNOW.COM, Jakarta – Open ecosystem approach, and a grassroots strategy that leverages a ubiquitous fixture in Indonesian society – the warungs or mom-and-pop stalls found in every neighbourhood of Indonesia.
How do we raise the quality of life for 275 million of Indonesia’s residents? In a country where an estimated 66% of citizens are unbanked, financial inclusion is important for boosting shared prosperity across the country. Access to financial services could help the poor and most vulnerable in society break out of poverty, reduce inequality, develop entire communities and drive economic growth. And financial technology could hold the key.
Financial technology or fintech is technology and innovation that aims to compete with traditional financial methods in the delivery of financial services. It is an emerging industry that uses technology to improve activities in finance. At its core, fintech is utilized to help companies, business owners and consumers better manage their financial operations, processes, and lives by utilizing specialized software and algorithms that are used on computers and, increasingly, smartphones.
Indonesian technology company Grab is one of the biggest names looking to make a mark in the segment. What sets it apart is its grassroots strategy.
“When we expanded into the fintech space in 2017, we started by acquiring an online-to-offline business, Kudo or now known as GrabKios. At the beginning, we are focusing on empowering traditional mom-and-pops stalls or known as warung by enabling them to purchase the goods for their stalls via the app and also provide various digital products,” says Anandhita Kasetra, Director of Financial Technology Strategy, Grab Indonesia. “Our goal now is to empower our agent network to bring financial services to every Indonesian in every corner of the country. It’s an exciting space with unexplored opportunities, especially since according to OJK, 51 percent of the adult population in Indonesia does not have a financial account.”
Empowering traditional sellers, helping the unbanked
This is a mammoth challenge, given that technological and financial literacy rates are relatively low and basic infrastructure for Internet connectivity is lacking particularly in rural areas.
For Grab, the solution lies in an open ecosystem approach, and a grassroots strategy that leverages a ubiquitous fixture in Indonesian society – the warungs or mom-and-pop stalls found in every neighbourhood of Indonesia.
“We have realized that as a vast archipelago with a huge population, user preferences of Indonesian are fundamentally different from location, socioeconomic, and background. The best way we can serve our customers and encourage adoption of financial products is by making sure we make what they need easily available to our users, at the point when they need it. That’s why we emphasize an open ecosystem approach, working with partners to bring the best products to our consumers that are best suited to their needs,” he explains.
Teten Masduki, Minister of Cooperatives and SMEs of Republic of Indonesia stated that there are 3.5 million traditional warungs in Indonesia, making it an ideal catalyst to drive financial services.
“One very tangible way of bringing financial services to the masses – is by putting them within physical reach of every Indonesian”, added Anan. “And in Indonesia, almost everyone is within walkable distance to a warung.”
Sugiyati, a kios owner in Abepura Old Market, Jayapura is helping hundreds of traditional market sellers transact everyday.
“Today, millions of GrabKios agents available in more than 500 cities across Indonesia are helping the unbanked and underbanked society in Indonesia to access financial services. It’s available in their neighbourhood, and also local markets. They can enjoy the services anytime, at their convenience,” Anan said.
