Geography-Based Funding and the Fintech Securities Crowdfunding Ecosystem in Indonesia: A Mixed-Method Analysis (Inkubis Jurnal Ekonomi dan Bisnis)

Summary

• Fintech activity in Indonesia is highly geographically skewed, with approximately 89% concentrated in the Java–Bali region and only 11% distributed across other regions.p.1
• Indonesia's unique geography of more than 17,000 islands creates spatial barriers that impact information access, trust, and capital distribution for MSMEs.p.2
• The structural equation model demonstrates an R-square of 0.611 for the Ecosystem construct, explaining 61.1% of its total variance.p.3
• Funding has a direct positive effect on the Fintech Securities Crowdfunding Ecosystem, supported by a T-statistic of 2.938 and a p-value of 0.004.p.3
• Geography plays a statistically significant mediating role between Funding and the SCF Ecosystem, exhibiting a T-statistic of 2.269 and a p-value of 0.025.p.4
• The quantitative portion of the research relies on empirical survey data collected from 150 active investors across major Indonesian SCF platforms.p.8

Key insights

1. Social Network Analysis reveals that SCF platform providers act as the primary structural hub connecting issuers and investors.p.4
2. Retail investors driven by yields and promotional campaigns provide the main liquidity, whereas institutional capital remains an underutilized weak tie.p.5
3. Direct digital outreach from platforms to remote MSMEs frequently fails without local community figures serving as trust bridges.p.6
4. Operational frictions occur between platforms and custodian banks due to slow settlement processes and legacy banking infrastructure.p.6
5. Policymakers like OJK and industry bodies like ALUDI should introduce targeted regulatory incentives for financing MSMEs in frontier, outermost, and disadvantaged (3T) regions.p.8