Comparative industry analysis between rural banks and financial technology companies in Indonesia

Cynthia Anggi Maulina, Dony Abdul Chalid

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review


The purpose of this paper is to analyze the differences of the business model between Bank Perkreditan Rakyat (rural bank, hereafter BPR) and financial technology (hereafter fintech) company, especially that provide loan for Small and Medium Entreprises (SMEs). The analysis focuses on funding resources, operational processes, assets-liability management, risks, and prices. After conducting qualitative research, the result shows that while BPR and fintech have different business models, they both have similarities in financing products. BPR should pay attention to assets and maintaining optimal liquidity level. Fintech does not burden by regulation on assets and liquidity because its financing and the distribution of fund depends on investors. Both BPR and fintech company determine loan pricing by the cost of fund and overhead. The average loan interest of BPR ranges from 21% to 24%, while average loan interest of fintech company ranges from 11% to 30% depending on the results of credit scoring analysis. BPRs are much more hampered by regulation than fintech, including the maximum extent of lending and business activities limitations based on BPR's core capital classified in its business activities.

Original languageEnglish
Title of host publicationBusiness and Management Issues in the Global and Digital Era
Subtitle of host publicationIndonesian Perspectives
PublisherNova Science Publishers, Inc.
Number of pages15
ISBN (Electronic)9781536165302
ISBN (Print)9781536162752
Publication statusPublished - 11 Nov 2019


  • Financial technology
  • Microfinance
  • Rural bank
  • Small bank


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