Millennial generation shows a flourishing appetite on investing in the government securities. According to the ministry of finance, until July 2019 millennial investors within the age bracket of 19 to 39 years has dominated the investment in Retail Government Securities (SBR). The value of millennials’ investment is accounting for 51.24% of total, an increase from 42.2% over the same period of 2018.

Reasoning: In September 2019 the ministry of finance issued another SBR called SBR008 series with an indicative target of Rp2 trillion fund collection. The individual investors can buy SBR008 with a minimum order value Rp1 million to a maximum of Rp3 billion over the period of 5 to 19 September. Different from other government securities such as the Indonesian Retail Bonds (ORI), SBR has a floating coupon (interest rate). The coupon of SBR can increase when the interest rate benchmark rise. However, the coupon cannot decrease to a rate lower than the initial rate. SBR is a non-tradable financial instrument, but there is an option of early redemption facility within one year after the issuance.

Previously, the investors of SBR were dominated by those over 40 years old. Since last year, the government has been expanding the investor base of government securities and targets under-40 years old investors. Supporting facilities have been developed to give easier access for the millennials to invest. One of them is based on digital technology called e-SBN. The e-SBN enables retail and individual investors to purchase the government securities online. When the SBR transaction can only be done offline, the share of millennials investors in SBR was only 20% to 23%. After going online, millennials investors have been dominating the SBR transaction. To lure more millennial investors, starting from the offers of SBR008 series, the finance ministry adds three e-commerce platforms as the new channels for transaction. The three platforms are Bukalapak, Tokopedia, and Finnet. After adding them, the number of financial institutions eligible to serve the SBR transactions became eighty-six institutions.

The government invites more fintech to involve in SBR offering in a bid to attract more millennials as investors in government securities. The participation of the e-commerce would facilitate millennials to invest in a more practical way because they do not have to come to the bank. Anytime and anywhere everybody can invest in SBR with a laptop or cellphone connected to the internet. Online transaction without the necessity to do offline transaction in banks would also change the perception that investment on financial instruments, includes in government securities, can only be done by the rich people.

Takeaway: The upward trend of millennials investing in financial instruments like SBR is a positive development. The trend not only help the government to accumulate domestic funds for financing the country’s development, but also to make financial investment as a productive habit for young generation. Today, the millennials still invest in small value of money, on average Rp1 million each. In the near future, experience from the current investment could motivate them to invest in higher value along with the increase in their income.

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