Direct Lending Emerges as New Growth Engine for Indonesia’s Digital Banks
Key Takeaways
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JAKARTA, Investortrust.id — Digital banks in Indonesia intensify their push into direct lending as new credit products gain traction and reshape growth strategies across the industry.
The shift reflects a broader evolution from ecosystem-based lending to more organic loan expansion, enabling digital banks to widen margins, strengthen customer engagement, and reduce overreliance on third-party platforms.
Across the 10 largest digital banks, at least nine already offer direct lending features through mobile applications, ranging from cash loans to PayLater products. Tenors vary widely, from six months for bluExtraCash and Krom Kredit to 30 months for products such as Tunaiku and Superbank’s adjustable loans.
Interest rates also differ significantly. Some products offer competitive pricing starting at 1.39 percent flat per month for Jago Dana Cepat, while others use daily interest structures such as Neo Pinjam and PAS by Superbank.
Bank Jago, one of the country’s most prominent digital lenders by customer base, positions direct lending as its next growth pillar. Arief Harris Tandjung said the strategy aims to strengthen organic loan generation after four years of rapid expansion driven by digital ecosystem partnerships.
He said collaboration with ecosystem partners remains a major contributor, but sustainable growth requires diversifying revenue sources and building proprietary lending capabilities.
Bank Jago, which trades under the ticker ARTO, launched Jago Dana Cepat in October 2024 to meet rising demand for flexible digital credit. Director Sonny Christian Joseph said loan ceilings and rates differ for each customer based on transaction history and risk profiles.
He said technology enables more precise risk calculations so loan terms can be tailored to individual borrowers.
The product introduces responsible lending principles, emphasizing transparency, affordability, and financial education to encourage responsible borrowing.
Bank Jago plans to expand its product suite with Jago Dana Siaga, a short-tenor emergency credit facility designed for sudden expenses and liquidity needs. The initiative builds on the adoption momentum of Jago Dana Cepat.
Direct lending contributed only 4 to 5 percent to Bank Jago’s total loan portfolio as of September 2025, but the contribution is projected to rise steadily within four to five years.
Overall, Bank Jago’s credit surged 36 percent year on year to Rp 23.5 trillion by September 2025, with 96 percent still originating from partnership and ecosystem lending.
Asset quality remained strong, supported by prudent underwriting practices. The bank maintained a gross non-performing loan ratio of 0.4 percent, below the national banking average.
With the addition of direct lending, Bank Jago now offers one of the most comprehensive retail lending suites among Indonesia’s digital-first banks, supported by a rapidly expanding user base that reached 18.6 million customers as of September 2025.
The bank’s performance also improved materially. Net profit after tax reached Rp 199 billion in the first nine months of 2025, rising 132 percent from Rp 86 billion during the same period in 2024.
Arief Harris Tandjung attributed the earnings surge to strong digital ecosystem partnerships, growing funding customers, and disciplined credit expansion. Funding customers across the Jago and Jago Syariah apps rose to 14.5 million, up sharply from the previous year.
Third-party funds climbed 41 percent year on year to Rp 23.9 trillion by September 2025, reflecting higher customer activity and stronger trust in the bank’s digital offerings.
He said Bank Jago’s digital solutions continue to deliver value, helping millions manage their finances more effectively and driving higher engagement across product lines.
The bank’s total assets grew 28 percent to Rp 34.5 trillion, supported by a 98 percent loan-to-deposit ratio and strong capital adequacy at 32.9 percent.
Arief said the bank remains committed to balancing growth and profitability through sustainable innovation and collaboration with platforms, financiers, and digital ecosystems.
While Bank Jago advanced aggressively into retail credit, Amar Bank also reported strengthened financial performance supported by digital product adoption and rising customer liquidity.
Amar Bank’s net profit rose 15 percent year on year to Rp 174.6 billion in the third quarter of 2025, driven by a 24 percent increase in operating income.
President Director Vishal Tulsian said the bank recorded higher net interest income and a significant uplift in non-interest revenue as more users adopted its digital solutions.
Third-party funds grew 93 percent year on year, underscoring trust in Amar Bank’s digital services and the bank’s positioning around the message save now, spend later.
The interiror view of Amar Bank’s office building in Jakarta, captured on Friday, Nov 14, 2025. Photo: Courtesy of Amar Bank.
Senior Vice President David Wirawan said prudent liquidity management supported the bank’s expansion into productive lending sectors.
He said strong deposit growth enabled Amar Bank to channel more credit to micro, small, and medium enterprises and productive retail segments.
More than 60 percent of Amar Bank’s loan portfolio went to MSME and retail borrowers, aligning with the bank’s mission to expand financial access and support broader economic activity.
The combined performance of Bank Jago and Amar Bank highlights a broader industry trend: digital banks are transitioning from ecosystem-dependent models to more balanced structures where proprietary lending products play a growing role in profitability.
Direct lending products such as Dana Cepat, Dana Siaga, and various PayLater and cash-loan features across the sector are emerging as key drivers of fee income, interest revenue, and customer stickiness.
Analysts expect digital banks to deepen their presence in unsecured retail credit, supported by data-driven credit scoring, automated risk monitoring, and high-frequency transaction patterns that shorten risk cycles.
For Indonesia’s digital banking industry, the next phase of expansion will be shaped by product innovation, risk discipline, and the ability to monetize multi-million-user ecosystems through responsible and sustainable lending models.