SAVINGS BOND RITEL SBR003 Debut to Digitized Bond Market Herman Sary Tua 2018 Asian Regional Public Debt Management Forum Directorate of Government Debt Securities Directorate General of Budget Financing and Risk Management Ministry of Finance, Republic of Indonesia
Retail e-commerce Sales in Indonesai Number of Digital Buyers in Indonesia WHY SELLiNG ONLiNE (1) 2 In millions 5,78 24,9 28,1 31,6 35,5 39,2 42,1 43,9 2016 2017 2018* 2019* 2020* 2021* 2022* In billion USD 7,06 8,59 10,34 12,34 14,42 16,48 Retail Government Bonds distribution platform needs to adapt to the future Indonesia Economic Digital Trends. 2016 2017 2018* 2019* 2020* 2021* 2022* *) forecast Sources: BPS, Bappenas, Nielsen, World Bank, UN, Statista, A.T. Kearney Analysis
WHY SELLiNG ONLiNE (2) Countries with the biggest internet user as of June 2017 (in million) Internet User based on age clustering (2017) 3 Demographic bonus in the era of digital economy facilitates Government s roadmap of online- Bonds Retail Issuances Source: Survey from Association of Indonesian Internet Service Providers, 2017
WHY SELLiNG ONLiNE (3) The shifting of societies awareness toward Financial Technology is remarkable 4 HAVE HEARD OF FINTECH Have you heard of the term Fintech? YES 28,34% 2016 2017 NO 32,80% NO 71,66% YES 67,20% USING FINTECH Do you use a Fintech service at this moment? Source: Daily Social Id. YES 18,46% NO YES 81,54% 60,96% NO 39,04% 4
Case Study-Savings Bond Retail 003 (SBR003) 5 Distribution Agent 5 Bank 1 Securities Company 1 Fintech Peer-to Peer Lending 2 Special Securities Company (Fintech)
How to Buy Investors guidelines to order/buy SBR003 REGISTRATION 1. Investor has to register via Agents Electronic System 2. Create SID (Single Investor Identification) and Securities Account (if needed). ORDER 3. Investor orders via Agents Electronic System having fully understand all terms and conditions as stipulated in the Memorandum of Information 4. Investor receives billing code via Agents Electronic System or email 5. This code (billing code) is later to be used for payment 6 CONFIRMATION 8. Statement of Account as the confirmation of the ownership of the retail bonds shall be sent to investor s registered email via Agents Electronic System PAYMENT 6. Based on billing code, investor pays in certain Banks *) via teller, ATM, internet banking, mobile banking, under specified time limit 7. Investor receives transaction number & notification of completed order via Agents electronic system and registered email
Distribution (coverage) This heat map shows the Capitol City (Jakarta) remains the major/dominant 13 The Online System managed to reach all 34 Provinces in Indonesia The top 3 biggest book order were in Java, with Jakarta was the highest The top 3 lowest book order were from West Sulawesi, West Papua and North Maluku
Distribution (coverage) The online platform has assisted the increasing order volume from Central, Eastern & Western Area of Indonesia (excluding DKI Jakarta) 8 SBR002 SBR003 Shifting to online distribution platform results in a better distribution/coverage. Nominal order from Middle and Eastern part of Indonesia, as well as Western Indonesia (exclude Jakarta) increased by 3 percentage points The total nominal order book reached IDR1.93 trillion, almost double than the initial target, comprising of total order 8,672 from 7,642 investors from all 34 provinces in Indonesia Almost ⅔ (74.4%) of all investors are new investors (5,683 investors).
New Investors (by Age) Young generations increased significantly 9 Total New Investors 5.683 561 253% 2,509 106% 1,623 43% 990 28% <25 years old 25-40 years old 41-55 years old >55 years old New Investors were dominated by the group of 25 40 years old. The youngest group of investors (<25 years old) were the least in terms of number. However, this group recorded the most significant increase (253%) from 222 investor to 561 investor.
Order Book Successfully reached out retail investors Indonesia 10 Nominal (Volume) 0.22% 7.72% Investor 4.57% 6.71% 18.97% 37.20% 32.70% 1-5 juta million >5-100 Juta million >100-500 Juta million 26.83% >500 Juta Million - 1 Miliar 1 Billion >1 Miliar billion 42.92% 22.16% Major (dominant) nominal per order (in terms of size) was >IDR 1 billion, followed by the order of >IDR100-500 million. The nominal order under IDR100 million is relatively still small, only at 7.94%. However, most investor (61.89% investor) ordered in the size of up to IDR100 million, proving that the online system has successfully reached out retail investors in Indonesia.
Key Takeaways Positive things from the new system 11 Successfully issued online with the total completed order exceeded initial target of Rp1 Trillion The first ever Saving Bonds Retail (SBR) issuance using SID (Single Investor Identification) as a unique code This issuance reached more retail Investor (61,89% of total investor nominal ordered under Rp100 Million, and average nominal order per Investor decreased) Online system produced better outcomes for Distribution Agents compared to previous issuances With the online system, order book from Middle and Eastern Part of Indonesia increased significantly Online system created more new investors which were dominated by young generation (25 40 years of age). The ratio increased significantly than the previous issuances Accurate, efficient and real-time book order monitoring through online dashboard
Future Improvements 12 More public outreach and socialization Shortening the time to create SID and Securities Account Continuous evaluation of the online system, not just in the Central System (e- SBN), but also in the Distribution Agent
THANK YOU Directorate of Government Debt Securities Directorate General of Budget Financing and Risk Management Ministry of Finance of the Republic Indonesia Gedung Frans Seda Lantai 4 Jl. Wahidin Raya No. 1, Jakarta Pusat Kode pos: 10710 Call Center: Call Center: 3505052 ext. 30 Fax. : (021) 3846516 Email: surat.utang.negara@kemenkeu.go.id sbn-ritel@kemenkeu.go.id Site: www.djppr.kemenkeu.go.id www.kemenkeu.go.id/sbr Instagram: @djpprkemenkeu Twitter: @DJPPRkemenkeu Facebook: DJPPR Kemenkeu 13