1. Indonesia is home to ~64 Mn MSMEs who employ 97% of the country’s workforce and account for ~61% of the GDP

MSMEs are the backbone of Indonesia’s economy accounting for more than 60% of its Gross Domestic Product.

There are more than 60 Mn MSMEs currently in the market, cut across sectors and different legs of the value chain. Wholesale & Retail is the sector with the largest share of MSMEs.

Indonesia MSME Overview

Note – *Sectoral data in 2018 are based on the Economic Census 2016 (only for non-agriculture sectors)

2. MSME’s face multiple challenges in managing unorganized & complex financial operations

MSMEs are facing multiple challenges in their day-to-day operations – Credit Collection from customers, manual bookkeeping, high capital cost, payment reminders, etc. are the major cited ones. There is immense scope to drive efficiencies within their day-to-day operations and finances.

MSME Pain Points


3. BukuKas and BukuWarung are tyring to address some of these challenges for MSMEs and have scaled well over the past year…

The Digital Ledger sector saw a lot of movement in 2020 with multiple funding rounds across the players.
Bukukas & BukuWarung are the top emerging players in the market. Their key focus has been on addressing the manual bookkeeping challenge faced by the MSMEs.

Being an asset-light play, both firms have been able to quickly scale their footprint and boast of a large registered and active userbase.

Digital Bookkeeping – Top players

Both players are slowly extending their offerings to include more use cases and additional features and are striving to constantly improve their value proposition to MSMEs.

Digital Bookkeeping – Offerings & Verbatims of benefits to MSMEs

4. …but there are some challenges to overcome and monetization avenues need to be carved out & integrated into the business model

Formulating a monetization strategy for a digital bookkeeping platform requires extending the focus towards more integrated play by offering other services like digital payments, lending, etc. Cross-selling will then be crucial to driving synergies enabling a clearer path to profitability.

Also, there are other fintech players & eB2B players who are a threat as they are targeting the same pool of MSMEs with some overlaps in services offered.

Key challenges for digital ledger platforms

5. Players need to quickly evolve into offering integrated services to drive sustainable value in the long term

Indonesia’s Digital ledger segment is still in the initial phase where players are setting up operations & aggressively acquiring new users.

There is vast headroom for growth and with strong funding support, we expect the players to start exploring allied Fintech segments like lending, Payments, PoS etc. Successful addition and integration of such allied services will make or break the case for these players. We are already seeing a similar scenario play out in the case of Khatabook which is one of the major BookKeeping focussed players in India.

Fintech Services – Current Scenario

Note(s): (1) Includes only consumer insurance 2. Above player list is only for representative purpose & not exhaustive.


  • Roshan is a Partner at Redseer Strategy Consultants and is focused on Southeast Asia. He was ranked highly by key long-only and long-short institutional investors. He has organized several conferences, corporate events, and non-deal-roadshows.