Fintech
Why Indonesia? Scoring Six Emerging Markets for Digital Lending
· 4 min read · Nucky Poedjiardjo, Managing Partner
Investors and foreign lenders ask me this a lot, so here is my honest scoring. One disclosure first: I run a P2P lending company in Indonesia, so weigh my bias accordingly.
I compared six digital lending markets: Indonesia, the Philippines, Vietnam, Thailand, India, and the Latin American markets foreign lenders usually look at — Mexico, Brazil and Colombia.
How I score a lending market
- Market size — adults you can actually reach
- Credit gap — people banks still don't serve
- Digital readiness — smartphones, e-wallets, e-KYC
- Regulation and licensing — and whether there is a clear path to a licence
- Pricing room — what's left after credit losses and funding costs
- Competition — a 5 means less crowded
The scores, out of 5
| Market | Score out of 5 |
|---|---|
| Indonesia | 4.3 |
| Philippines | 3.5 |
| India | 3.3 |
| Latin America | 3.3 |
| Vietnam | 3.0 |
| Thailand | 2.7 |
The two variables that decide it
Two things explain most of the difference in expected returns. The first is the size of the underserved population you can reach digitally. The second is how much room you have to price for risk once losses and funding costs are paid. The other factors matter, but these two move the numbers the most.
Why the others score lower
India has scale and the best digital rails in the region, but it is very crowded, and banks and large NBFCs with cheap capital squeeze pricing. Latin America has pricing room, but currency swings and high funding costs eat a big part of it. Thai households already carry heavy debt. Vietnam still has no complete legal framework for peer-to-peer lending.
Why Indonesia ranks above the Philippines
Scale. Indonesia has roughly 2.5 times the population, with a similar underserved segment.
A dedicated licensing regime. OJK built a specific P2P lending licence framework — LPBBTI, now referred to as pindar — and keeps refining it. You know what you have to comply with.
Credit data infrastructure. SLIK, Dukcapil-based e-KYC and the Fintech Data Center give lenders better underwriting inputs than most neighbours have.
Two honest caveats
OJK has lowered the interest rate cap every year since 2024, so pricing room is thinner than it was when these decisions were made.
And I would now give the credit gap less weight. Access has improved a lot, and the harder work today is financial literacy and consumer protection.
Where the case stands today
Indonesia still ranks first for me, though for a different reason than five years ago. Today the case rests on scale plus a regulatory framework you can build a long-term business on.
How would you score these markets? Tell me where you disagree.