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LinkAja acquires P2P lender iGrow, taps into SME financing
Financial Services Authority (OJK) data showed that last year, only Rp 32.52 trillion (US$2.25 billion) or 15 percent of P2P loan disbursements went to borrowers outside of Java, signaling a wide untapped market on other Indonesian islands.
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S
tate-backed e-wallet firm LinkAja has acquired peer-to-peer (P2P) lending start-up PT iGrow Resource Indonesia (iGrow) for an undisclosed amount as part of its efforts to tap into the small business financing market.
LinkAja president director Haryati Lawidjaja said on Thursday that the e-wallet’s network in tier two and three cities would open up iGrow’s market access to the regional small and medium enterprises (SME) segment.
Financial Services Authority (OJK) data showed that last year, only Rp 32.52 trillion (US$2.25 billion) or 15 percent of P2P loan disbursements went to borrowers outside of Java, signaling a wide untapped market on other Indonesian islands.
“The expansion of our business line to include financing shows our effort in providing financial access to middle- and low-income families, as well as SMEs,” Haryati said in a press statement.
LinkAja’s statement did not disclose the acquisition value but hinted that it was covered by the $100 million raised through its series B funding, which includes an undisclosed amount from ride-hailing company Gojek.
Read also: E-wallet LinkAja receives Gojek investment
Indonesia’s economy relies heavily on small businesses, which account for more than 60 percent of gross domestic product (GDP) and employs 90 percent of the labor force.
“LinkAja has strong business fundamentals and it collaborates with state-owned enterprises and big technology companies. This will accelerate iGrow’s mission to have a positive impact on SMEs,” said iGrow business development director Jim Oklahoma.
Established in 2014, iGrow is an agriculture-focused P2P lender that has raised at least $175,000 from Google’s Launchpad Accelerator and 500 Startups, among other investors, according to publicly available data compiled by Crunchbase.
The e-wallet firm claims to have over 68 million registered users and 370 million registered merchants across Indonesia. The platform offers bill payment features and bank transfer functions, among other services.
Established in 2019, LinkAja is owned by several giant state-owned enterprises, including Telkomsel, Pertamina, Bank Mandiri and Bank Rakyat Indonesia (BRI). The e-wallet is spearheading the government’s foray into the domestic fintech market.
