The Indonesian Central Securities Depository (KSEI) has noted that Fintech platforms are expected to support the rise in the number of Indonesia’s retail investors in the foreseeable future, especially as the country’s younger consumers begin to seriously explore investment options after the COVID-19 outbreak.
As reported by the Jakarta Post, the latest data from KSEI reveals that the number of Indonesian investors in equities, mutual funds and bonds surged 36.6% year-to-date or YTD (from December 2019). There are currently 3.4 million investors as of October 2020 with the majority being retail or individual investors. Nearly half of these people have made investments via Fintech platforms and 48% are under 30 years of age.
Uriep Budi, Director at KSEI, has stated that this is an “incredible prospect” that the numbers could go up over the coming year as Indonesia is projected to have “a demographic bonus.”
Uriep is referring to a (expected) period when the nation’s productive population, between ages 15 to 64, starts outnumbering its nonproductive population, which would be below the age of 16 and over 64 years of age. The country’s working age population is on track to reach 70% of the total population within the next decade.
Uriep also mentioned that Fintech platforms were well-suited for more frequent but relatively smaller investments, which he believes will increase in the future.
The number of Indonesian retail investors has increased significantly during the COVID-19 pandemic, which has also led to millions of people losing their jobs and made many quite concerned about their future income. Indonesian analysts have said that the large-scale social restrictions (PSBB) have forced many residents to stay indoors which may have indirectly led to the surge in retail investments.
KSEI data has also revealed that young consumers are now the fastest-growing investor group in the country. In fact, the number of investors between 18 to 25 has increased over 300% from 2016 to mid-2020, and the number of investors between 26 and 30 has grown more than 200%.
As reported recently, Indonesian President Joko Widodo has recommended that local Fintechs should adopt good governance practices to support rapid tech developments.
Indonesia’s social security program provider, KMSB, recently partnered with Logiq to offer microlending services to local residents.