Digitizing Indonesia, One Arisan at a Time

RUMA builds apps and gives smart phones to the rural population in Indonesia to give financial empowerment.

That day was one of my first days interning at RUMA. I was dropped off by my family car, and Aldi, the founder of one of the most prominent start-ups in Indonesia, got down from a loud, run down bus that doesn’t seem like it belonged in a big metropolitan city like Jakarta.

Then again, one may argue the paradox is apt for the city; like many urban centers around the world, Jakarta habitants don’t accurately represent the 95% of the country’s population (this author included). Drive two hours out and you’ll find mom-and-pop shops, brick houses (painted ones for the relatively wealthy), and motorbikes- lots of them. But also, smartphones. By 2017, 78% and 41% of the 250M people in Indonesia will have mobile and smart phones respectively, a statistic that got many business school graduates to flock into the entrepreneurship scene2. The stats can be deceiving, though, as internet usage is primarily driven by Facebook. Google? Most have never heard of it. Online shopping? Credit card penetration is a mere 3.2%3, and 40% of the population earns less than $2 a day4.


Driving the point home, while highlighting potential and challenges of 95% of Indonesia
Driving the point home, while highlighting potential and challenges of 95% of Indonesia


Enter RUMA, a technologically empowered fintech social enterprise that focuses on the 95%5. They operate by hiring and training agents all around Indonesia to work together with a network of RUMA partners –mom-and-pop shops or entrepreneurial community leaders in villages- and provide them with smart phones equipped with RUMA’s app, receipt printers, a few marketing materials and training. With these tools, RUMA partners can sell airtime in cash and facilitate bill payments for electricity and water, daily routines that used to take a few hours of traveling time into the city. RUMA agents will then go around every few days to collect money to be stored centrally.


In an ocean of me-too internet companies in Indonesia, RUMA differentiates itself by understanding and gaining the trust of their customers. Targeting families with income on average $2.50 per day, RUMA uses technology to digitize existing habits and utilize them to promote financial products6. Aldi himself often visits his favorite RUMA partners and learn from them to innovate; these interactions are a big part of what RUMA does.

In 2014, I was there to help roll out a new product called Mapan, which essentially digitizes an Indonesian tradition called arisan. Arisan is a social gathering usually attended and organized by wives in a community. Every month, they would pool funds and together decide on purchasing an item to be raffled off. The rules differ from one arisan to another, but the concept is widely adapted and unique to Indonesian culture due to our strong communal values, coupled with the lack of access to formal financial support. The digital platform that RUMA builds helps groups safely keep collected funds and guide them towards aspirational purchases, such as electronics, educational materials, or modes of transport. In order to do so, they also partnered with e-commerce sites or traditional suppliers to market their products in the Mapan platform.


A screenshot of Mapan's ad, showing local government official looking for wives of households, only to find them in an arisan, equipped with Mapan, of course.
A screenshot of Mapan’s ad, showing local government official looking for wives of households, only to find them in an arisan- equipped with Mapan, of course.


People-centered innovation and a vast network of trusted agents may give them near monopoly, but RUMA faces challenges from other start-ups in e-commerce including KUDO, which facilitates e-commerce to the rising middle class by collecting cash payments at point of delivery7, and potentially e-money companies from existing banks, though efforts are highly fragmented8. Regulations in Indonesia regarding financial technology is still underdeveloped, but many are optimistic about the prospects- there are only a handful of granted e-money licenses. Eventually that’s where everyone is headed: Go-pay, a payment system built into Gojek (Uber for motorbikes) was established just a few months ago with collaboration with the leading Indonesian bank, BCA, to move commerce away from cash9.


Amidst competition, RUMA’s biggest challenge is to capture value as it grows to serve the bottom pyramid; to fulfill their double bottom line, RUMA’s promise to low operating margins mean that product innovation may be the only way to thrive. RUMA may not need a change of direction, but its road is winding: to survive the competition and regulatory turbulences, its financial/IT products they come up with have to be strongly driven by community values, a key piece to succeed in Indonesia, to finally move towards full mobile banking when the timing is right.

Being a social enterprise is challenging, but in a world where talent is scarce, RUMA’s story is magnetizing to highly ambitious millennials looking for meaning (again, this author included). Ultimately beyond strategy, I believe the key in maintaining that auspicious goal is hiring. The way I understood it, everyone in the office knew what they stood for, which trickles down to every single decision they make. Everyone knows digitization is inevitable, but everyone in RUMA sees it in the hands of an agent, going around villages in motorbikes, with a smart phone in their hands.


Word count:800



  1. http://www.wsj.com/articles/tech-companies-struggle-to-get-world-on-internet-1429631689
  2. https://www.statista.com/statistics/257046/smartphone-user-penetration-in-indonesia/
  3. http://thejakartaglobe.beritasatu.com/business/indonesias-2015-credit-card-rule-means-almost-half-million-fewer-circulation/
  4. https://www.omidyar.com/investees/ruma
  5. https://www.adb.org/sites/default/files/publication/177017/ino-paper-04-2015.pdf
  6. http://www.progressoutofpoverty.org/sites/default/files/PT%20Ruma%20PPI%20Mini%20Case%20Study.pdf
  7. https://www.techinasia.com/indonesia-online-to-offline-ecommerce-funding-news
  8. https://www.techinasia.com/17-emoney-options-indonesia
  9. https://m.tempo.co/read/news/2016/05/17/090771752/go-jek-gandeng-bca-luncurkan-gopay-ini-alasannya





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Student comments on Digitizing Indonesia, One Arisan at a Time

  1. Very interesting! I am always amazed by entrepreneurs who have been successful building a product for a masses instead of building a product for the top 5% of the economy which may or may not slowly trickle down to the masses. I had seen this same technology while traveling through east Africa about 2 years ago.


    I would be very interested to see what lessons can be shared between developing geographies so that people aren’t constantly reinventing the wheel. I also am fascinated by the way certain technologies are leap frogging others in countries where technologies we take for granted never had a chance to penetrate (i.e. credit cards).

    Looking forward to your startups.

  2. Hi Levi – thank you for this blog post, definitely very heartfelt reading about a company whose mission is to create social impact through financial empowerment of the 95%. One idea I had along with the great work RUMA is currently doing is to offer financial education through its apps to the villagers and rural Indonesians who might not have sophisticated understanding of how they can invest/save their income. Another potential idea is for RUMA to partner with the banking system to offer micro financing to these mom and pop shops to empower these people to be entrepreneurial and move up the social latter. Love to hear your thoughts on the feasibility of these ideas.

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