SELECTION OF EXPANSION CITY CANDIDATES IN PT BFS FOR FSG PRODUCT BY USING ANALYTIC HIERARCHY PROCESS

Abstract

PT BFS is a local banking institution that has been operating since 1991 in Surabaya. In 2014, PT BFS launched FSG products which become their featured product until now. FSG is a financial technology product in Indonesia which provides online unsecured loan. Since FSG launched, FSG serves Jabodetabek (Jakarta, Bogor, Depok, Tangerang, Bekasi) and Surabaya areas. With the success of FSG in 2017, PT BFS has interest to serve more loan applications in other cities. Because PT BFS does not use any reliable method for decision-making process, there is a probability that the decision taken is poor quality, biased and lack of data. This study meant to improve decision-making process in choosing the right candidates for city expansion by implementing AHP method. FSG product has six candidates for potential city candidates. Based on the FSG product experts and literature review, criteria that need to be assessed for expansion city selection are market demand, market knowledge and monthly cost. Those criteria translated into eight sub-criteria which are monthly loan application number, city population, regional minimum wage, internet penetration rate, financial inclusion rate, average citizen income per year, non-performing loan, and building rental cost per m2. From the AHP calculation, demand criteria play the big role in weight priority vector. From the weight vector result, best candidates to choose are Bandung, Medan and Semarang.