Pegadaian Setups Rp1.2 Trillion Budget to Become Fintech Company

Pegadaian (state-owned fiduciary company) setups Rp1.2 trillion budget to support its ambition to be fintech company this year. Majority will be used for Pegadaian Digital Services (PDS) app development, acquire 600 new agents, expanding services, and going global.

"We'll run farther, therefore, this year's capex will be bigger [to help] for going global. Pegadaian finally will have fintech, fiduciary, and pawn service," Sunarso, Pegadaian's President Director, said in an official release.

Sunarso continued, to become a fintech company, the corporate transformation has passed "dreaming stage" after going through "diagnosis stage". Later, it will get into "design" and "delivery stage" to support go public effort in 2020. Corporate will keep digitizing business, improving outlet service, revitalizing warehouse and logistics, and maintain excellent service.

PDS becomes Pegadaian's new ammo to enter fintech, serving loyal and potential young customers. Customers can apply for pawn or microcredit in need, pay instalments, accommodate customers in opening new accounts and top-up gold savings.

Pegadaian targets to acquire two million new customers through the app by the end of this year. At that time, total customers are expected to reach 11.5 million.

Fiducia industry generally consists of a small number of players. Other player, Pinjam, is focused on providing online services.

Opening coffee shop

To engage with millennials, Sunarso said the company is using "direct-to-consumer" strategy by opening "The Gade" coffee shop which located in Kebayoran Baru, Jakarta. Potential customer are able to have access to all Pegadaian services, including applying for capital, fiduciary, and so on.

There will be more branches in other locations throughout Indonesia. The coffee shop is to attract male customers which currently not optimally engaged.

The 72% of Pegadaian's current active customers are women and 68% are under 45 years old.

"Men usually resist to access Pegadaian. Therefore, we open The Gade to attract them."

Pegadaian also launched a fiduciary product with no interest to reach millennials, particularly students. With this product, customers can apply for a loan up to Rp500 thousand for two months period. It is targeted to acquire one million customers.

– Original article is in Indonesian, translated by Kristin Siagian