Photo: Investree co-founder and CEO Adrian Gunadi speaking to Salaam Gateway on September 18, 2018 in Kuala Lumpur, Malaysia. SALAAM GATEWAY/Stephanie Augustin

Islamic Finance

Investree to be first P2P distributor of upcoming Indonesia gov’t sukuk issue - CEO

KUALA LUMPUR - Indonesia’s peer-to-peer (P2P) lending marketplace PT Investree Radhika Jaya (Investree) is set to be the first P2P platform to distribute government-issued sukuk scheduled in the coming months, Adrian Gunadi, the start-up's co-founder and CEO told Salaam Gateway.

The P2P platform was the only non-bank fintech player acting as a distribution channel for the Indonesian government’s conventional retail bond issuance in May.

“The government is issuing retail sukuk online within two series, and ours is the only fintech non-bank channel for it,” Gunadi told Salaam Gateway on the sidelines of the Global Islamic Fintech Summit 2018 in Kuala Lumpur.

“[The government is] planning to issue the first series of sukuk within the next three months, the latest being in the first quarter of 2019,” Gunadi added.

Details of the upcoming sukuk have not been revealed but Gunadi is optimistic of its size based on the success of the conventional bond issuance.

“Just to take an example from the second series of retail bond issuance that we participated in, the target initially was two trillion rupiah ($134.7 million), but it was oversubscribed to seven trillion rupiah ($471.5 million). That shows the potential of the sukuk series,” said Gunadi.


Islamic banks in Indonesia account for only around 5 percent of the total assets of the overall banking sector.

Gunadi believes there is a big opportunity for Islamic fintech players or those with ‘Islamic windows’, such as Investree, to reach the country’s Shariah-sensitive population.

“Investree launched the Shariah proposition earlier this year, providing financing to e-commerce sellers on Bukalapak, Lazada and Tokopedia, among others. It’s a big data play, since the KYC (know-your-customer) process is handled by the marketplace,” said Gunadi.

P2P players in Indonesia face issues of asset quality, since small and medium-sized enterprises (SMEs) are often reluctant to open their books. Investree’s partnership with e-commerce marketplaces and outsourcing of the KYC process allows the P2P platform to verify businesses and help it scale faster.

Investree will replicate this strategy when it enters Thailand by January 2019, Gunadi said.

“We are working with a local partner to get assets. Our invoice financing focus has helped us, and contributes 90 percent to our business.

“Secondly, with our online seller financing, we are already talking to the likes of Lazada in Thailand. We believe we are slightly more advanced than the competition, in terms of how we integrate with e-commerce platforms,” said the former managing director of retail banking at Bank Muamalat Indonesia.

Investree launched in 2016. In July this year, the start-up closed an undisclosed amount Series B investment round led by Japan-based SBI Holdings. The P2P lender said at the time it will use the funds to improve the platform’s technology and product line, as well as marketing, talent acquisition and expanding into other markets in Southeast Asia.


Gunadi is currently also the vice chairman of the Indonesian FinTech Association, which has 130 members, 20 to 30 of which offer Islamic products and services.

“These players either they have a Shariah window or are pure Islamic players. The latter group operate largely in equity crowdfunding and P2P financing,” said Gunadi.

He said there is a $100 billion credit gap in Indonesia.

“70 percent of fintech players are still focused on payments and lending. There is still a lot of potential left to tap and can be resolved by fintech,” he said.

Fintech lending now accounts for 1 percent of total lending in Indonesia, according to the Indonesian FinTech Association. It is looking to grow this to between 5 percent and 7 percent in four years.

This would value total fintech lending in Southeast Asia’s largest economy at between $5 billion and $10 billion, mainly in the SME space, said Gunadi.

“The good thing about Indonesia is regulators are very proactive, while banks are very open to collaborating with fintech players,” he said.

“Now the focus is on how the association can work with the likes of DIFC (Dubai International Financial Centre) to bring in more global capital -- especially Islamic capital -- into Indonesia for SME financing.”

(Reporting by Stephanie Augustin; Editing by Emmy Abdul Alim

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Stephanie Augustin