Umang Rustagi, cofounder and CEO of Kredivo Indonesia, spoke to The Jakarta Post's Aditya Hadi about building the company and how he plans to use the new funds.

Question: Can you explain the business lines of Kredivo?

Answer: Previously known as FinAccel, Kredivo Holdings is the parent company of Kredivo, Krom and KrediFazz.

Kredivo is a digital credit platform in Indonesia and Vietnam that gives customers instant credit financing for e-commerce and offline purchases, based on real-time decisioning. Users can buy now and pay later across Indonesia's retail commerce network with one of the lowest interest rates among digital credit providers in the country.

KrediFazz is a personal loan platform in Indonesia, while Krom Bank Indonesia, formerly known as Bank Bisnis Internasional, is the group's banking entity and the operator of the soon-to-be-launched Indonesian neobank Krom.

How is the growth of Kredivo?

Over the last six years, Kredivo's transaction value has grown at a compound annual growth rate (CAGR) of more than 100 percent. Our approved customer base today is in the same range as the credit card population of Indonesia, and we intend to exceed it over the next year or two.

Kredivo has a presence across nine of the top-10 e-commerce merchants in Indonesia. It is also the market leader with a buy now, pay later (BNPL) wallet market share of at least 50 percent across major Indonesian e-commerce merchants.

What social dynamics make you believe BNPL businesses like Kredivo can be successful in Indonesia?

We believe BNPL will continue to grow because of the high credit access gap in Indonesia amid the acceleration of digital adoption.

The growth and popularity of e-commerce that demands convenient digital payment options [also pushes that trend], and by leveraging technology, BNPL has become an effective and efficient solution to reach and serve the underbanked population in Indonesia, which is the largest in Southeast Asia.

Has Kredivo achieved a net profit? What is your strategy to profitability?

Our strategy is to be a customer-centric company focusing on solving customers' pain points and delivering an amazing customer experience.

[We also try to] achieve strong credit metrics and unit economics, have a management team with a clear vision and […] teams that are executing really well on its strategy, due to which the company has become both high-growth and cashflow profitable.

In recent months, many technology companies laid off employees in pursuit of profitability. How does Kredivo maintain employee morale under these conditions?

By communicating and showing that our company’s fundamentals and growth trajectory are strong. In fact, we did not and are not planning to lay off a single staff member in pursuit of profitability. On the contrary, we are still hiring.

What is Kredivo's strategy for maintaining employee loyalty?

Culture is the one and only answer. As a workplace, we always try to create an environment where people can thrive, and our vision is that they will remember Kredivo as the most rewarding experience throughout their careers.

We hire selectively and always look for the same qualities in people: passionate, intellectually curious, team player, strong communicator, biased for innovation and wanting to do impactful work. Thus, we can collaborate with like-minded people in working toward a common goal.

Lastly, at the end of the day, we just need to genuinely take care of our team's wellbeing.

Regarding the latest funding Kredivo received, some say that bodes well for Indonesia’s tech ecosystem as it shows domestic start-ups can still attract new investment amid the tech winter. Do you agree?

It's hard for us to comment on the ecosystem. What is clear is that investors have become a lot more discerning about allocating capital, compared to a few years ago. Kredivo's ability to fundraise came down to its high growth and sustainable business model that has withstood the test of time, as we're now seven years into the journey.

The external environment remains pretty volatile, but the players in the ecosystem with strong business models and conservative financial management will continue to find backers.

Does Kredivo still have plans for an IPO?

We are happy to stay private for the time being and will evaluate public listing options later.

What is Kredivo's biggest challenge this year?

The challenges that are still faced by the BNPL industry are low digital literacy levels, which can certainly hinder its penetration.

The digital literacy level in Indonesia last year was 3.54 out of 5. Because of that, there is a high potential for digital fraud and data theft, with digital security literacy having the lowest score of 3.12 out of 5.

Therefore, comprehensive education is needed, especially related to responsible borrowing for customers, so they can use BNPL services safely according to their needs and abilities.

Besides that, unequal digital infrastructure, especially in second- and third-tier cities. Regardless, the BNPL penetration rate is consistently increasing in these areas.

Lastly, BNPL integration into offline-online merchants is still limited, whereas the increasing number of integrated online and offline merchants will encourage more massive BNPL usage.