State-owned pawnshop PT Pegadaian has set aside Rp 500 billion (US$35.26 million) from its own funds to invest in a number of local financial technology (fintech) companies this year.
President director Kuswiyoto said in Jakarta on Monday that the funds would be invested in five fintech firms. “Hopefully we can start to inject them by the fourth quarter of this year,” he told reporters in Jakarta.
The fintech firms that the company was eyeing included a peer-to-peer lending firm, he said. “We want to invest in startups that provide loans because it is in line with our business,” he said. However, Kuswiyoto refused to go into more detail as he said it was still being evaluated.
He said that the company had several criteria for the fintech firms, including those that had strong capital, good risk management and systems and wide customer bases so that both Pegadaian and the fintech firm could support each other.
“But most importantly, we’re only looking at fintech firms that have already obtained licenses from the Financial Services Authority,” he said, adding that the expansion into fintech was necessary to keep the company relevant in the digital age.
Kuswiyoto said the company intended to become a strategic investor in PT Fintek Karya Nusantara, which was backed by state-owned enterprises (SOE) and operated a digital payment platform, LinkAja.
Although he did not mention how much Pegadaian would inject, he said the company was currently in talks to determine the stake the company could hold. The company would also consider whether it would inject the funds into LinkAja directly or through a vehicle like a venture capital firm, Kuswiyoto said.
Seven SOEs jointly own LinkAja. State-owned Telkom mobile operator subsidiary Telkomsel is the largest shareholder with 25 percent, followed by state-owned lenders Bank Mandiri, Bank Negara Indonesia (BNI) and Bank Rakyat Indonesia (BRI), which hold a 20-percent stake each. Mortgage-focused lender Bank Tabungan Negara and state-owned energy holding company Pertamina also hold a 7-percent stake each, while state insurance firm Jiwasraya holds a 1 percent stake in the platform.