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Fintech to boost investment

Fintech platforms are projected to aid the surge in the number of Indonesia’s retail investors in the future, particularly as the younger generation is tapping into investment amid the COVID-19 crisis, the Indonesian Central Securities Depository (KSEI) has said. KSEI data show that the number of investors in equities, mutual funds and bonds increased 36.6 percent year-to-date (ytd) from December last year to 3.4 million as of October this year, of which the majority are individual investors. Almost half of the investors joined through fintech platforms and 48 percent were below the age of 30, according to the data.

Indonesia’s working age population is expected to reach 70 percent of the total population by 2030. He went on to say that fintech platforms were also useful in handling more frequent but smaller investments, which he projected as the trend for the foreseeable future. The number of retail investors has increased during the pandemic, which has driven millions into unemployment and made many nervous about their future income.

Experts have also cited the large-scale social restrictions (PSBB) that force people to stay at home as part of the push factor of the retail investor boom. Previous KSEI data show that young people are the fastest growing investor group. The number of investors aged 18 to 25 grew 338.61 percent from 2016 to May 2020, while the number of investors aged 26 to 30 grew 204.97 percent.

The rising participation of domestic retail investors has provided the local bourse, the IDX, with a liquidity buffer, as Rp 40.88 trillion (US$2.88 billion) of foreign capital fled the country as of Nov. 20 amid the health crisis. IDX data on Nov. 20 also show that domestic investors have made up 66 percent of the total trading value in the bourse this year, while foreign investors have made up only 34 percent.

(source: The Jakarta Post)