When Jakarta-based banker Sheldon Chuan suddenly lost his Wi-Fi connection during a business trip to a remote village in Indonesia's South Sulawesi Province, he wasn't surprised.

As senior vice-president of the financial technology platform Amartha Financial, Chuan was visiting the village to serve its clients — women micro-entrepreneurs who cannot access loans from traditional banks. He recalled how these women used to walk to the only neighbor with a modem in the entire village just to get a one-hour Wi-Fi connection each day to use their digital wallets.

Amartha's solution was to build a community hub where all the residents can get a Wi-Fi connection and to send field agents who provide loans and information on entrepreneurship and digital security.

"That's Amartha's (microfinance) model," Chuan said. "It is a hybrid of offline and online. You want people as much as possible to be online, digital, because it's more cost-efficient and dynamic. But we know that offline (services) will still be there at least for five to 10 years."

Amartha's experience in South Sulawesi reflects how fintech is helping a huge number of unbanked and underbanked Indonesians find much-needed capital for their livelihoods.

Chuan was in Hong Kong as part of the Indonesian delegation attending the Hong Kong FinTech Week, which runs through Friday. They joined the event not only to share their experience in developing the fintech industry in Indonesia but also to gain insights and potential investments from Hong Kong — one of the world's leading financial centers.

Chuan said that for many microentrepreneurs, having a digital wallet means having financial access — not just a place to save money, but a way to receive payments. This is what financial inclusion is all about, he said. "First of all, you can circulate your money around."

For Marcella Wijayanti, head of education, literacy and research at the Indonesian Fintech Peer-to-Peer Lending Association, fintech — especially digital lending — has been a "game changer for financial inclusion in Indonesia".

Digital lending has opened access to credit for millions of people, including micro and small entrepreneurs long excluded from traditional banking, she said.

By joining Hong Kong FinTech Week, Indonesian industry executives can show the global community "that we can build infrastructure and services for those who may not be able to access banks", she added.

Transformative tech

According to the World Bank, about 43 percent of Indonesians aged 15 and above still lack a bank account. With more than 17,000 islands, Indonesia faces geographic challenges and limited digital infrastructure in remote areas, which have left it with the world's fourth-largest unbanked population.

The rise of financial technology has transformed Indonesia's banking landscape. A report on Southeast Asia's digital economy by Google, Temasek and Bain & Company last year found that the increasing adoption of QR codes has significantly boosted e-wallet transactions, particularly in Indonesia and Vietnam.

Foreign fintech companies are also expanding aggressively into Indonesia's underpenetrated credit market, the report said.

As Southeast Asia's largest digital economy, Indonesia boasts a young, tech-savvy population and a smartphone penetration rate of 90 percent, according to the Indonesian Fintech Peer-to-Peer Lending Association.

Natasha Ardiani, CEO and co-founder of Durianpay, a business-to-business payments platform, said the spread of e-wallets encouraged retailers to accept QR payments and eventually led to the establishment of digital banks.

"Adoption of digital payments in Southeast Asia has become very prevalent and has proliferated very, very fast," she said.

Contact the writers at prime@chinadailyapac.com