CLIK Ready to Support Financial Institutions in Providing Affordable Loan Facilities

Jakarta, 16 April 2024 – Bank Indonesia (BI) recently published a report on national lending in the March 2024 Board of Governors’ Meeting Results (Hasil Rapat Dewan Gubernur). In the banking sector, credit grew 11.28% year on year (YoY) to IDR 7,047 trillion.

Meanwhile, credit financing in the MSME sector grew by 8.85% year on year (YoY). Indonesia’s MSMEs’ growth is correlated with cheap and accessible credit, which is also reflected in the government’s recent decision to sustain the Lending Facility interest rate at 6.75%. 

In an official press release, the Financial Services Authority (OJK) stated that, despite the seemingly positive growth rate mentioned above, with the increasing number of non-bank financial institutions channelling funds to meet people’s consumption needs, it is important to have measures in place to increase Banks’ role in distributing loans to MSMEs and consumer credit in the form of multipurpose loans.

Indonesia’s Private Credit Bureau PT CRIF Lembaga Informasi Keuangan (CLIK) sees the government support as a good opportunity to stimulate lending activity by suggesting the lenders to start adjusting their loan disbursement strategy. “This is the time to shift back from the notion of financial inclusion to the notion of financial deepening. Lenders should be able to increase both ticket size and tenure of issued loans targeting durable consumptive spending and mid-/long-term productive lending at prime interest rates,” said President Director CLIK Leonardo Lapalorcia.

Leonardo added that household and productive lending have been in survival mode for the last four years. “Since the pandemic, lenders have significantly slowed down disbursement, and we have seen growth predominantly in online lending and Buy Now Pay Later (BNPL). This potential change of pace should have a much greater spill-over effect to boost Indonesia’s Gross Domestic Product (GDP) growth, compared to the small ticket size, short-term loans so popular in the market over the last five years,” he said.

According to the World Bank, MSMEs continue to encounter obstacles in accessing credit, with an estimated 60% facing difficulties securing necessary financing in Southeast Asia alone. The financing gap for MSMEs in developing countries is estimated at around $5 trillion, surpassing the current levels of MSME financing by 1.3 times.

“It is crucial for Banks to meticulously assess potential borrowers with the same speed and accuracy as online lenders while offering lower interest rates and leveraging their cheaper funding costs. Banks need to refocus on direct disbursement efforts with more sophisticated assessment methods to mitigate credit risk. The path forward is to make credit accessible by leveraging the abundant liquidity in Banks and state-of-the-art lending best practices to fuel the Country’s GDP growth,” explained Leonardo.

CLIK is preparing to support Banks with a suite of new products and services this year. Recently, the company launched CLIK Spectrum, an innovative credit-scoring product that combines credit behavioural information with telecom and alternative data scores. Through the new product, CLIK hopes to see more Banks re-qualify and move a large portion of medium-risk customers to the low-risk segment, which in turn can increase credit approval rates on consumer loans. 

CLIK Chief Commercial Officer Leony Agnes Marie added that innovations by CLIK as a Private Credit Bureau marked the commitment of our company to boost growth and inclusivity for credit access for Indonesian society. “Our credit scores will give a new perspective toward creditworthiness. With the rise of digital finance and consumption patterns, financial institutions should adopt a new approach to measure their prospective debtor profile,” she said.

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About PT CRIF Lembaga Informasi Keuangan (CLIK)

PT CRIF Lembaga Informasi Keuangan (CLIK) is Indonesia private credit bureau that provides services in assisting financial decision making for both Financial Institutions and Non-Financial Institutions. CLIK is an affiliate company of CRIF SpA (CRIF) and a joint venture with other leading technology and service providers. CLIK was licensed by the Financial Services Authority (OJK), on September 30, 2019 to operate as a Credit Bureau. CLIK aims to use the international experience that CRIF has accumulated over more than 30 years and the technology that CRIF has deployed in 55 countries to build a customized credit bureau service ecosystem for Indonesia.

CLIK obtains financial information reported by Financial Institutions to OJK through the Financial Information Service System. This information along with other non-financial information obtained from non-reporting Financial Institutions and Non-Financial Institutions is aggregated to create products ranging from Credit Scores to Portfolio Alerts. The products that CLIK creates enable institutions to make efficient and accurate decisions involving customers and potential customers through transparency and closing information gaps.