Could it be far too late to buy cash advance in Indonesia?

End of a year ago we penned about Chinese cash advance companies Indonesia that is entering market.

You almost certainly understand the model of numerous Chinese organizations – they prize rate and aggressiveness, and also the assumption that is prevailing: enough time window was restricted, soon leading organizations will emerge, making no room for belated comers.

Good development certainly

Top payday that is chinese apps now deliver significantly more than 10,000 loans a day, mostly from perform clients. The stickiness of clients is actually a good indication for the businesses. Additionally, it is well well worth noting that lots of regarding the loan that is top in Asia aren’t doing a great deal more than this quantity.

UangTeman, on of the top rivals, can be rumoured to stay the entire process of increasing a round that is big. Another rumour this is certainly available in the market is Ant Financial’s possible purchase of Cermati – a financial item contrast solution (and much more).

So just how has got the landscape changed since our final article, and crucially for possible investors, will it be far too late to join the battle?

Still space on the market

Are typical these reasons pointing towards an industry saturation in not too distant future? We think the clear answer isn’t any.

Recently, a VC friend called us, saying he had been perplexed because of the marketplace. “We thought the ideal solution would be to obtain clients because aggressively as you are able to,” he stated. “However, it was over fifty percent a 12 months in addition to consumer purchase expense (cac) continues to be really low”.

This really is a sign that is telling the marketplace is certainly not yet a red ocean or an oligarchy. In Asia, the CAC rose from 5 RMB (US$0.75) to very nearly 200 RMB (US$30) – a growth of 40X – within per year! More than 12,000 companies joined up with that rush in Asia – plus in Indonesia now we think it’s going to nevertheless just just simply take some time when it comes to CAC to increase somewhat.

Additionally, the infrastructure in Indonesia is distinctive from compared to China. Many people nevertheless lack bank reports or third-party wallets (to disburse money into and repay from); KYC can’t be done reliably and also at scale yet; credit scoring continues to be in its infancy and several loan that is top identify certain clients as opposed to build generic guidelines.

Another main factor is the fact that for pay day loan solutions, consumer stickiness can there be but commitment just isn’t.

Experience with Asia reveals that many devoted clients will borrow from numerous events to handle their income (or income with their smaller businesses). Good customers aren’t retained by providing them more loans – more services are expected; nevertheless, for organizations in order to make money that is quick they probably concentrate attention on more clients as opposed to horizontal expansion.


Along with these factors above, we genuinely believe that the rise should come from experiencing the (good) clients who’ve perhaps maybe not yet been tapped into – and you will find great deal of these. Perhaps the many aggressive players will just target a few metropolitan areas as of this moment.

Ergo it isn’t yet far too late to join into the rush that is gold. But if you decide to wait down further, we can’t guarantee whether or not the opportunity continues to be here.

Additionally, be mindful associated with the rumours – there are numerous of them and sometimes times they tell completely things that are opposite. The majority are accurate; numerous others aren’t. This could impede your choice making, causing either missed possibility or missteps.