Internship Experience with Stockbit — Jarod Hong
Over the summer, through the Global Innovation Immersion programme organized by SMU’s Institute of Innovation & Entrepreneurship, I secured an internship with Stockbit, an Indonesian financial services FinTech company with > 1 million users.
I took on this opportunity as Indonesia is one of the largest markets in South East Asia and I wanted to have greater exposure to the developments in the region. Though the internship was remote due to Covid, I still had a great learning experience at Stockbit. Here are some of my takeaways from the internship :
- Huge potential of Shariah-compliant investment vehicles
Shariah is an Islamic law from the teachings of the Quran, outlying a set of principles and guidelines to abide by. These principles encompass how Muslims manage and invest their savings. The main rule of Shariah law is the inability to receive interest. The Islamic rule states that money is not allowed to create more money without any effort or work. Banks have to purchase assets that generate a return for their customers instead of lending them out for a higher interest rate. There is also a limit to how much a corporation can borrow (debt servicing ratio) to be considered a shariah-compliant business. Indonesia’s stock exchange has an index specifically for Shariah-compliant companies (Indonesia Sharia stock index (ISSI)).
With Indonesia having the largest Muslim population in the world, there are immense opportunities for companies and institutions in Indonesia to develop Shariah-compliant investment products and grow ecosystem solutions. The solutions that are rolled out successfully in Indonesia can be similarly developed for neighbouring Southeast Asia nations with a sizeable Muslim population such as Malaysia and Brunei, or to the Middle East.
Fun fact: Other than lenders not being able to charge interest, businesses cannot be operating services or selling products that are considered haram such as alcohol, pork, and gambling.
- Untapped potential in a rapidly developing market such as Indonesia
Indonesia is a rapidly developing nation with a burgeoning middle class. StockBit targets this group of consumers by increasing their channels and touchpoints for customers to purchase investment products. They have partnered with other e-wallets in Indonesia to facilitate transactions. Stockbit’s solution offers consumers to invest with less capital than what Indonesian Banks require. Many Indonesians are thus taking this opportunity to purchase money market funds that have a similar risk profile as a savings bank account, but return a higher yield to the consumers. With this focus, Stockbit was able to capture many customers and experience rapid growth.
Also, StockBit can look towards FinTech investing solutions such as RobinHood or Stashaway to determine which approach could gain traction in Indonesia. StockBit will be able to validate these ideas in the Indonesia market fast, determine which investment strategy will work and implement it quickly.
To summarize, Indonesia is a huge country with a large population. There is a huge opportunity to educate the middle class on financial literacy and allow them to start investing in their domestic market. I thoroughly enjoyed the internship with StockBit, having improved my knowledge about the Indonesian market and startup scene tremendously. I strongly believe understanding ASEAN markets is essential as it affects Singapore indirectly. I am excited to see the future development of Indonesia’s tech startups.
I am thankful how my experience with Protege Ventures has supported my learning in Stockbit. Protege Ventures gave me tremendous exposure to learning about many start-ups from different industries. Interacting with founders sharing about their mission and understanding the problems they face have prepared me to look at startups from a different angle. I learnt how to ask meaningful questions to learn more about a business, and this has helped me get the most out of understanding StockBit’s business model and its market.