Indonesia’s economy has been hard hit by COVID-19 in 2020, with large-scale social restrictions and social distancing (PSSB measures) taking a heavy toll on both businesses and consumers. A sharp decline in consumer spending and a drop in exports is expected to result in GDP contracting by 1.
As further support, the government has offered subsidies to banks to encourage them to increase their lending and to reduce their lending fees. However, many banks have failed to respond positively to this with the banks and the government seen to have conflicting interests.
Fintech companies saw rapid growth during the review period, with these helping to provide access to credit for the country’s large unbanked population. The companies provide an easy and fast application process and do not employ strict lending requirements like those applied by the banks.
There remains a great deal of uncertainty surrounding Indonesia’s economy with COVID-19 yet to be contained at the time of writing, with the potential for further measures being introduced if numbers start to rise. After seeing a projected 1.
Many banks are starting to use digital methods to provide a better service to consumers. For example, towards the end of 2019, DBS Indonesia launched an instant personal loans feature (consumer credit without any secured assets held as guarantee).
As consumer confidence gradually returns it is expected that Indonesia’s growing middle class will look to invest in big ticket items that they had put off purchasing during 2020. This includes products such as household appliances and cars, which are seen as important among the country’s aspirational middle class.
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Understand the latest market trends and future growth opportunities for the Consumer Credit industry in Indonesia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
If you're in the Consumer Credit industry in Indonesia, our research will help you to make informed, intelligent decisions; to recognise and profit from opportunity, or to offer resilience amidst market uncertainty.
This report originates from Passport, our Consumer Credit research and analysis database.
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