Digital Solutions Provided by the Millennial Generation

KOMPAS/FERGANATA INDRA RIATMOKO

A farmer harvests cabbage in Genting Village, Cepogo, Boyolali, Central Java, Friday (10/7/2020).

Every complaint and problem are opportunities in disguise. These opportunities have inspired young people to develop a platform to share roles, collaborate and establish a network to grow together and solve problems.

They could be everyday problems faced by people. These days we can easily name the solutions to cope with such problems. With regard to capital problems experienced by farmers, breeders, fishermen and micro and small business owners, for example, there are many online lending start-ups called peer-to-peer lending companies that can help provide loans with cheap interest rates, at least lower than those charged by loan sharks.

The problem related to the drop in prices of agricultural and fishery products also have its “medicine”. Start-up companies such as Tanijoy, RegoPantes, TaniFund, Crowde, Sayurbox, and Aruna, for example, are able to cut distribution chains by linking farmers or fishermen directly to markets or consumers. Thus, food producers can get a better price.

Also read: The Winding Path of a Young Entrepreneur

A number of start-up companies have also assisted farmers to boost crop productivity and modernize the production process. In addition to helping find investors and markets, several start-up companies have also connected landless farmers with land owners.

What is the reason behind the birth of start-ups that are mostly established by young people aged between 20 and 30 years? The concerns of three students, namely Utari Octavianty (27), Indraka Fadhillah (27), and Farid Naufal Aslam (26) on the condition of the communities in coastal areas led to the establishment of Aruna.id, a technology company engaged in the marine and fisheries sector, in 2015. "The idea to establish Aruna .id was inspired by Utari and Indraka\'s experience as part of a coastal community, "said Farid, the CEO of PT Aruna Jaya Nuswantara, which run the Aruna.id website on Monday (26/10/2020).

KOMPAS/MARIA PASCHALIA JUDITH JUSTIARI

CEO of PT Aruna Jaya Nuswantara or Aruna.id Farid Naufal Aslam (center) in a discussion session on the SDGs (Sustainable Development Goals) 2019 Annual Conference held by Bappenas in Jakarta, Tuesday (8/10/2019).

Living on the coast, Utari and Indraka\'s minds are filled with questions, why do coastal communities mostly live in difficulty ? Why can fishermen only sell their catch to middlemen? The three founders of Aruna.id broke through limitations with technology. They built a system that can link coastal communities with buyers, both at home and abroad.

The website has a feature which displays price information. With this price data, fishermen understand price movement in the market which enables them to get a fairer price for their catches. Aruna.id also assists groups of women to process fish in order to get added value.

The technology and assistance provided by Aruna.id are quite helpful. According to Farid, the average income of partner fishermen has increased from Rp 2 million per month to Rp 15 million per month. Currently, around 11,000 fishermen spread across 31 regencies / cities in Indonesia are partners of Aruna.id.

Also read: Making Farming ‘Go Viral’

A similar concern also motivated M Nanda Putra, together with his friends, Kukuh Budi Santoso and Febrian Imanda Effendy, to establish Tanijoy, a start-up which provides capital to farmers . They set up the company when their ages had not yet reached 27 years. They help farmers to reduce their reliance on middlemen, boost land productivity, and get a better selling price.

Like Aruna and Tanijoy, the peer to peer lending financial technology (fintech) company Amartha was also born due to the same concern. Its founder, Andi Taufan Garuda Putra, realized there was an imbalance in the community, so he decided to leave his job at an IBM office to build a cooperative in Ciseeng, Bogor, West Java.

KOMPAS/TOTOK WIJAYANTO

Founder and CEO of Amartha Andi Taufan Garuda

Before transforming into a fintech company, Amartha operated as a small cooperative that provided capital for business women in Ciseeng. The targeted recipients were villagers who had difficulty to obtain loans from banks because they could not meet the strict lending requirement.

Amartha\'s approach worked well. Starting with a capital of Rp 15 million (about US$1,000), Amartha was able to provide credits to 1,000 customers in the first year. In 2015, Amartha\'s business model changed from a conventional micro-loan provider to peer to peer landing, which matches lenders and borrowers. As of October 2020, Amartha has disbursed loans amounting to Rp 2.7 trillion to more than 550,000 women, who run micro businesses in rural areas.

"One hundred percent of borrowers are women in the village. We want to help achieve sustainable development goals through the pillars of poverty reduction, women\'s participation in development, and reducing income inequality in rural areas, "said Taufan.

For a company like Aruna, the success is measured by its social impact. In March 2020, Amartha achieved the highest ranking as a social impact company from the Global Impact Investing Rating System (GIIRS).

One hundred percent of borrowers are women in the village.

Micro business

In the midst of the advancement of the information technology, young people are also actively involved in taking care of the nation\'s social capital and help others. The sharing economy or collaborative economy model, which allows several parties to collaborate and share roles, provide concrete solutions to problems faced by the community.

One of the start-up companies that provide such a solution is Moka. The company which was established by two young people, Haryanto Tanjo and Grady Laksmono, helps small entrepreneurs survive amid the Covid-19 pandemic.

Also read: A Factory of “Hydroganic” Dreams

Moka’s co-founder Grady Laksmono (32) said that Moka was established in 2014 out of the desire to develop micro and small businesses that have difficulty in managing their business digitally, especially in terms of point-of-sale (POS) services.

KOMPAS/ELSA EMIRIA LEBA

The launch event for A Cup of Moka (ACOM) in Jakarta, Tuesday (22/1/2019).

When they returned to Indonesia from the United States in 2014, Grady and Haryanto, who are professionals in the information technology field, found many small businesses, such as coffee shops, that still run their businesses manually. The clothes traders in Mangga Dua, Jakarta who have more than one store still recorded their transactions manually using paper and pens.

"Around us, many businesses have not been assisted by technology. We then thought, what can be done to help our MSMEs to become more advanced and digital. From there, the idea to set up Moka\'s idea appeared, ”said Grady, Tuesday (27/10).

Moka provides business ecosystem solutions to support sales of micro and small scale businesses. In addition to the POS application, which is a modern version of a cash register for recording all business transactions in detail, the Moka application also helps micro and small entrepreneurs do bookkeeping, purchase raw materials, and provide capital loans.

To develop its services for MSMEs , Moka is developing and collaborating with many parties, including online payment application providers such as OVO and Gopay.

Also read: Millennials’ Waves of Influence

Another innovation to assist small and medium enterprises is offered by Santara, a technology-based crowdfunding platform.

There is a condition where the need for financing is greater than available collateral.

According to Krishna T Wijaya, the chief business officer of PT Santara Daya Inspiratama , which runs the crowdfunding platform, many small and medium enterprises fail to “graduate” due to capital problems.

"At certain times, there is a condition where the need for financing is greater than available collateral. Due to this, they cannot be supported by formal financial institutions," he said.

On the other hand, there is a growing middle class, which can provide investment alternatives through a lending scheme that is fair, attractive and offers a good return, and can also help small and medium-scale companies. By buying the shares of a company through a crowdfunding scheme, they can contribute to economic development.

(DIMAS WARADITYA NUGRAHA / M KURNIAWAN)