Using the experience it obtained in the Netherlands (where it has invested more than €10 billion worth of Dutch retirement and insurance funds in mortgages), Dynamic Credit will now tap this potential in Indonesia where it is eager to offer more affordable credit to the Indonesian consumer.

Indonesia is home to more than 260 million people. Considering Indonesia is experiencing structurally high economic growth at a pace of around 5 percent year-on-year, the middle class is expanding rapidly. Meanwhile, retirement and insurance companies' premium income is rising sharply accordingly. Gast said this year Indonesian retirement and insurance companies can expect to collect a total of €20 billion worth of premium income.

However, there is limited availability of domestic investment opportunities for these retirement and insurance companies. For example, there are only around 20 domestic companies that regularly sell corporate bonds. Meanwhile, Indonesian retirement and insurance companies are not investing much in offshore investment instruments. Thus, between 10-30 percent of these companies' premium income goes to deposit accounts at local banks where they can only enjoy a 5-6 percent return.

Currently, Dynamic Credit is running a (pilot) trial experiment in Indonesia. However, this trial involves personal loans, not mortgages. For example, the disbursement of a loan to finance medical costs or a loan related to the renovation of a house.

After the pilot projects have finished, Dynamic Credit plans to expand significantly in Indonesia, with a particular focus on penetrating the nation's mortgage market. Gast said consumers will be able obtain a mortgage at Dynamic Credit with 20-40 percent lower monthly costs compared to a mortgage that is obtained from a local bank.

But whereas in the Netherlands consumers tend to meet obligations related to mortgage payments (and therefore it is an attractive investment instrument for investors), such compliance is less common in Indonesia. Therefore, (at least in the first phase) Dynamic Credit will work together with employers when selling mortgages to consumers. The employer will withhold the specific amount from a paycheck to reduce chances of default or identity fraud.

Based on information from Indonesia's Financial Services Authority (OJK), Dynamic Credit Asia was granted a certificate of registration as an information technology-based money lending services provider on 3 August 2017. Founded in 2003, Dynamic Credit has offices in New York City, Amsterdam and Jakarta.

Bahas