Bank DBS Indonesia has increased its channelling financing facility to Kredivo, the Indonesian buy-now-pay-later platform, to IDR 3 trillion, equivalent to approximately $190 million. The expanded credit line deepens the existing financing relationship between the two institutions and provides Kredivo with the capital it requires to pursue its stated target of reaching 20 million users, including through a significant push into Indonesia's tier 2 and tier 3 cities where digital credit penetration remains lower than in the major metropolitan centres.
The arrangement, announced as 2026 got under way, builds on a prior channelling finance partnership through which DBS Indonesia has already been providing funding to support Kredivo's lending operations. By increasing the facility to IDR 3 trillion, DBS is signalling a higher level of conviction in Kredivo's credit quality and growth trajectory, effectively backing the fintech's expansion plans with a substantially larger pool of institutional capital than had previously been committed under the partnership.
KREDIVO'S EXPANSION INTO SECONDARY CITIES
Kredivo has identified Indonesia's tier 2 and tier 3 cities as a priority growth market, recognising that digital financial services penetration remains relatively low outside the major metropolitan areas of Jakarta, Surabaya, and Bandung. These secondary cities contain a large and growing population of working adults with rising incomes but limited access to conventional credit products from traditional banks, making them a natural target for a BNPL provider that can onboard customers digitally and extend credit on the basis of alternative data rather than formal credit bureau records.
The 20 million user target is ambitious and reflects the company's confidence that geographic expansion combined with product development can unlock significant additional demand. Reaching those users will require sustained investment in customer acquisition, merchant partnerships, and the credit risk infrastructure needed to assess and price loans for borrowers who may have thin or no traditional credit history — areas where the additional DBS financing provides critical support for the scaling of operations beyond Kredivo's existing urban strongholds.
CHANNELLING FINANCE AND THE BANK-FINTECH MODEL
The channelling finance structure used in the DBS–Kredivo partnership is a common mechanism in Indonesian financial services, through which a licensed bank provides funding that a fintech disburses to end borrowers under its own brand and technology platform. The bank retains the credit risk and earns a return on the deployed capital, while the fintech provides the origination capability, data analytics, and customer experience layer that the bank may find harder to replicate independently in the digital lending segment.
For DBS Indonesia, the Kredivo relationship represents a means of gaining exposure to Indonesia's fast-growing consumer credit market through a digitally native partner rather than building the origination infrastructure itself. The increased facility reflects a deliberate allocation of balance sheet capacity toward the fintech partnership model, which the bank has embraced across several of its Southeast Asian markets as part of its broader digital strategy.
Kredivo, one of Indonesia's most prominent BNPL providers, uses the DBS channelling facility alongside other funding sources to manage its liquidity and match the capital requirements of its growing loan book. The IDR 3 trillion facility update positions it to sustain lending growth through 2026 as it pursues its user expansion targets across the archipelago and works to establish a commercially significant presence in markets beyond its current core geography.