Indonesia’s Bank Agro appoints Kaspar Situmorang as CEO, to build neobank

Bank Agro will build on app Pinang's clientele to build a digital-only bank.

Bank Rakyat Indonesia (Bank BRI) has appointed Kaspar Situmorang as the new CEO of BRI Agro.

In his new role, Situmorang is tasked with overseeing Bank Agro’s transformation from an agri-focused financial services provider to a full digital bank through its app Pinang.

The Bank BRI subsidiary currently operates as an agri-focused financial service provider.

“BRI Agro is now expanding its services beyond traditional agribusiness. The plan is to now cater to informal and underbanked workers across the entire gig economy,” said Situmorang regarding his new role.

“To give an image, this could include but certainly wouldn’t be limited to e-commerce solo merchants, warung owners, freelance service providers, drivers and in-home staff, repair people, and much more,” he added.

Key to Bank Agro’s plans to build a digital-only bank is Pinang, Bank Agro banking services app. First launched in February 2019 with a flat rate of 1.24% and a promise of approving loans in about two minutes, the app has since disbursed $4.87m (IDR70.6b) in loans across over 18,000 borrowers as of end-2020.

Pinang already holds a license as a digital bank by the Indonesian Financial Services Authority. This meant that BRI Agro will not be starting from scratch and will instead work on converting current customers and acquiring new ones for a fully digital banking experience, according to Situmorang.

Situmorang holds a strong background in overseeing the digital transformation of a bank having previously served as the division head of Digital Bank Development & Operations at Bank BRI.

During that period, he oversaw digital programs including the group’s now-famous open banking initiative BRIAPI, in-house artificial intelligence platform BRIBrain, and digital lending mobile app Ceria.

Gig economy
Under his leadership, Situmorang plans to guide Bank Agro into becoming “Indonesia’s official house of fintech and home of the local gig economy.”

“As the most sophisticated digital banking player in the country, with the full weight and reach of the BRI Group behind us, our mandate is to become Indonesia’s official house of fintech and home of the local gig economy. This requires a fully digital approach that offers low-interest products and lightning-fast processes,” he said.

In particular, Situmorang shared that the new bank will target the underserved segment, particularly the gig workers.

“Gig workers lack the social safety net that full-timers get to enjoy, such as insurance policies and pension plans. If a delivery rider gets into an accident or a freelancer falls sick, that’s lost income and a major expense to their business. Their vehicles and equipment are key to their livelihoods,” Situmorang explained.

“At the same time, gig workers are highly connected via their smartphones, giving us a direct line to this previously underserved market. The key is understanding all their financing needs and tailoring products that are competitive while ensuring loan approval and disbursement processes are as quick and easy as possible.”

The shift toward the gig economy is a departure from BRI Agro’s historical loan portfolio, where up to 75% of loans were distributed to agribusinesses both on and off-farm.

Established in 1989 as Bank Agro, it joined the Bank BRI family in 2011.