Many Fintech Startups Have Yet to Expand into Rural Areas: Here Are the Main Challenges
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Based on a survey report by the Indonesian Fintech Association (Aftech), many local fintech startups have yet to expand their market to rural areas. However, the majority plan to do so.
25.3% of surveyed fintech companies plan to expand to villages within the next 6 months to 1 year. Another 22.7% will expand similarly within the next 1-2 years, and 13.3% within the next 2 years.
In total, 61.3% of surveyed fintech companies intend to expand to villages, while 38.7% have no such plans.
The main challenge faced by fintech startups in expanding to villages is low financial literacy. This reason was chosen by 38.7% of respondents.
Furthermore, 34.7% of respondents cited inadequate rural infrastructure as the main challenge, such as limited connectivity stability, logistical issues, accessibility, and so on.
Another 12% of respondents felt that consumer trust in rural areas remains low.
"In addition, there are several other factors, such as cultural differences, information technology, human resources, and a market target concentrated in Jakarta," Aftech stated in its report.
Aftech conducted this survey with the Katadata Insight Center (KIC), involving 75 respondents representing Aftech member companies. The survey was conducted in Q2 2023 via an online questionnaire.
The majority of companies involved in the survey are located in Jabodetabek (92%), followed by Yogyakarta and Surabaya (1.3%). In terms of the number of employees, the majority of companies have fewer than 50 employees (50.6%), followed by 51-100 employees (24%).
"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."
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