Indonesia P2B lender Modalku wins 100 bln rupiah Series A funding

JAKARTA - Indonesia’s peer-to-business lending platform Modalku has received a 100 billion Indonesian rupiah ($7.5 million) capital boost from its parent company Funding Societies, Reynold Wijaya, Modalku CEO told Salaam Gateway.

Singapore-based Funding Societies won the Series A funding round that was led by Sequoia India with participation from individuals from Harvard University and existing investor Alpha JWC Ventures.

According to Wijaya, this is the largest sum raised by a P2P lending platform in Southeast Asia so far.

The capital will be used to fuel Modalku’s rapid growth and enable it to further drive financial inclusion and the growth of SMEs and micro enterprises (MSMEs) in Indonesia, said Wijaya. 

Modalku offers interest-based loans and does not currently extend Shariah-compliant financing but it facilitates loans for all eligible local businesses.

Shariah-compliant P2B and P2P financing platforms operating in Indonesia include Kapital Boost and Blossom Finance.

"We are paving a new way for Indonesian MSMEs to access credit. They can now receive financing directly from hundreds of lenders in Indonesia, including regular individuals and financial institutions.

“In exchange, Modalku’s lenders have the opportunity to earn returns above that of bank deposits, traditional fixed income products and life insurance investment-linked products. We believe that stronger SMEs build a stronger Indonesia,” he said.

He added that due to the lack of collateral and credit history, among other reasons, millions of credit-worthy Indonesian MSMEs are currently unable to receive loans. With the latest funding round, the company will accelerate empowering SMEs throughout Indonesia, starting from Bandung next month.

It currently operates in Jakarta, Bogor, Depok, Tangerang and Bekasi.

Since its launch in January 2016, Modalku has facilitated more than 10 billion rupiah ($760,000) worth of short-term lending to more than 40 MSMEs, while enabling their lenders to benefit from a 100 percent repayment record and a zero percent default rate, according to the lender.

Wijaya added that currently, loans on Modalku are approved in as quickly as 24 hours. The platform is also close to finalizing additional initiatives and partnerships to benefit even more MSMEs throughout the nation, he said.

Along with the Series A funding, Modalku has announced a partnership with Bank Sinarmas, which has committed an initial 10 billion rupiah of funds for loans. The company has also established partnerships with other technology players such as online marketplace Tokopedia for the site’s merchant financing.

© SalaamGateway.com 2016