Sea Ltd. and Gojek are snapping up Indonesian lenders, betting they can make headway into one of the world’s largest unbanked markets.
The buying spree is set to continue as financial technology firms set their sights on the nation’s more than 175 million Internet users, many of whom rely on online banking services. Sea has purchased PT Bank Kesejahteraan Ekonomi this year, while Gojek made its biggest fintech investment by spending about US$160 million ($212.3 million) to boost its stake in PT Bank Jago in December.
While Indonesia is by far the largest fintech market in Southeast Asia, it’s one of the few that don’t license digital-only banks. The UK, Hong Kong and Singapore have allowed virtual lenders, while neighbouring Thailand and the Philippines are actively studying the matter. That means acquisitions are the only way into Indonesia and the Financial Services Authority is pushing for more consolidation among its more than 1,600 commercial and rural banks in lieu of issuing new licenses.