Spike in internet usage is acting as a catalyst in boosting crowdfunding in Indonesia, which involves raising money from a large number of people to support a new business endeavor.
Crowdfunding in Indonesia is a strong instrument for raising funds from the general public in a quick, inexpensive, and seamless way. According to Statista, by 2025 the value of transactions related to crowdfunding in Indonesia would increase to US$7.5 million.
Given the huge opportunities, crowdfunding presents for businesses and the vast landscape of internet usage in Indonesia has set the stage for foreign investors to invest in the archipelago.
In this article, we will discuss important questions like what exactly is crowdfunding in Indonesia and how it works.
As Indonesia’s economy has grown in recent years, the aspiring middle class is heavily contributing to the growth of new creative industries such as coffee shops, fashion, and healthy food industries. The majority of these industries are start-ups or micro, small, and medium enterprises (MSMEs), who need money to secure, streamline and expand their operations.
Moreover, bankability is a common issue for these startups and MSMEs, which makes it difficult for them to expand their operations. In light of such problems, equity crowdfunding seems to be a viable solution.
The Financial Services Authority (OJK) of Indonesia, published Regulation Number 37/POJK.04/2018 on Information Technology-based Crowdfunding Services via Public Offerings (POJK 37). The question begs: what exactly is equity crowdfunding?
The method of acquiring essential capital (as for a new firm) by seeking contributions from a large number of individuals, particularly from the internet community, is defined by Merriam Webster as equity crowdfunding (also known as crowdfunding).
In a nutshell, equity crowdfunding is a method of bringing investors and businesses in need of capital together.
The following are the participants in equity crowdfunding activities as defined under POJK 37:
A platform provider must get a business license from the OJK in order to launch a crowdfunding platform. A platform provider must meet the following criteria to be able to apply for OJK licenses:
Amended Provisions on Crowdfunding Service Providers’ Mandatory Registration as Electronic Systems Providers issued on August 25, 2021, includes:
In compliance with POJK 37, the following are the crowdfunding standards the issuer must meet:
Cekindo is a business setup company that can make the crowdfunding business in Indonesia accessible and affordable for global individuals and companies. By using a crowdfunding model through your business, projects can be accomplished at a fraction of the total cost.
A crowdfunding business allows entrepreneurs to build working capital, where financing through conventional methods has become a challenge for most foreigners. We are a fully authorized business setup company in the country with specialists who can analyze the potential and feasibility of your crowdfunding business by using our expertise.