Unpacking Zero Percent Financing: An Innovative Solution for Sustainable Development

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Realease Date: 29 September 2025 - 11:48

Jakarta, September 25, 2025 - The EAI Partner Sharing Session on September 25, 2025, convened experts and practitioners to discuss a crucial topic: the future of zero percent financing. The session not only presented the concept but also explored its potential, challenges, and strategies for creating a fairer and more sustainable financing model, especially in the context of Indonesia.

 

Concept and Impact: Between Conventional Credit and Zero Percent Financing

Mr. Edo Irfandi, as the speaker, opened the session by comparing zero percent financing with conventional credit. Research data showed that this financing model has a significant social impact. Zero percent financing was proven to increase original income by 73%, and 88% of recipient families achieved infrastructure improvements. Although the volume of zero percent financing is still much smaller than conventional credit—14 trillion compared to 996 trillion—this model is considered more effective in supporting product variation and workforce development.

However, it was concluded that zero percent financing has a higher social impact, while conventional credit remains a better option for business expansion and asset acquisition on a large scale. The synergy between the two is key to achieving a comprehensive objective.

 

Segmentation and Risk Management: The Key to Reaching the Unbankable Segment

The session also highlighted the importance of market segmentation for zero percent financing, especially for individuals who do not have access to banking services (the unbankable). Mr. Edo Irfandi divided the target market into three categories: imported clothes, underpaid, and first-timer, based on business visibility and ability to pay. It was emphasized that each segment requires a different approach, and for high-risk segments, initial mentoring and income stabilization are necessary.

To mitigate risk, the session discussed a customized credit scoring method. Factors such as marital status, business age, and home ownership were highlighted as important indicators. It was found that married individuals have a higher level of responsibility, businesses that have been operating for at least three years carry a lower risk, and home ownership can reduce the likelihood of default by 55%. The effectiveness of credit scoring lies in combining these various factors.

 

Building a Sustainable Financing Model

The main challenge identified was the lack of a sustainable funding structure, as many financing programs in Indonesia are one-time projects. As a solution, it was suggested to form an endowment fund to ensure program continuity.

To achieve a broader scale, a combination of zero percent and commercial models is needed, while maintaining a focus on social impact rather than just profit. The education financing model, such as a scholarship scheme with monthly payments, was presented as a concrete example of how zero percent financing can be integrated with empowerment programs.

 

Jakarta, September 25, 2025 - The EAI Partner Sharing Session on September 25, 2025, convened experts and practitioners to discuss a crucial topic: the future of zero percent financing. The session not only presented the concept but also explored its potential, challenges, and strategies for creating a fairer and more sustainable financing model, especially in the context of Indonesia.

 

Concept and Impact: Between Conventional Credit and Zero Percent Financing

 

Mr. Edo Irfandi, as the speaker, opened the session by comparing zero percent financing with conventional credit. Research data showed that this financing model has a significant social impact. Zero percent financing was proven to increase original income by 73%, and 88% of recipient families achieved infrastructure improvements. Although the volume of zero percent financing is still much smaller than conventional credit—14 trillion compared to 996 trillion—this model is considered more effective in supporting product variation and workforce development.

However, it was concluded that zero percent financing has a higher social impact, while conventional credit remains a better option for business expansion and asset acquisition on a large scale. The synergy between the two is key to achieving a comprehensive objective.

 

Segmentation and Risk Management: The Key to Reaching the Unbankable Segment

 

The session also highlighted the importance of market segmentation for zero percent financing, especially for individuals who do not have access to banking services (the unbankable). Mr. Edo Irfandi divided the target market into three categories: imported clothes, underpaid, and first-timer, based on business visibility and ability to pay. It was emphasized that each segment requires a different approach, and for high-risk segments, initial mentoring and income stabilization are necessary.

To mitigate risk, the session discussed a customized credit scoring method. Factors such as marital status, business age, and home ownership were highlighted as important indicators. It was found that married individuals have a higher level of responsibility, businesses that have been operating for at least three years carry a lower risk, and home ownership can reduce the likelihood of default by 55%. The effectiveness of credit scoring lies in combining these various factors.

 

Building a Sustainable Financing Model

 

The main challenge identified was the lack of a sustainable funding structure, as many financing programs in Indonesia are one-time projects. As a solution, it was suggested to form an endowment fund to ensure program continuity.

To achieve a broader scale, a combination of zero percent and commercial models is needed, while maintaining a focus on social impact rather than just profit. The education financing model, such as a scholarship scheme with monthly payments, was presented as a concrete example of how zero percent financing can be integrated with empowerment programs.

 

Challenges and Future Steps

The session also summarized several key challenges, such as the small scale of zero percent financing, high risk of default, and the lack of an effective credit scoring mechanism for the unbankable segment. In response, several action items were agreed upon:

  • The Research Team will further analyze the impact of zero percent financing and develop a more effective credit scoring model.

  • The Operations Team will design a mentorship program and a sustainable funding structure.

  • The Finance Team will evaluate the optimal combination of zero percent and commercial financing models to ensure operational sustainability.

This sharing session affirmed that despite the significant challenges, zero percent financing has great potential to be an innovative solution that not only drives economic growth but also creates a more equitable and empowered society.