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P2P lender Modalku seizes opportunity to fund social commerce borrowers
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Illustration of financial technology (fintech). (Shutterstock/File)
P
eer-to-peer lender Modalku plans to expand its funding portfolio to include social commerce amid the rising usage of e-commerce and messaging platforms by small and medium enterprises (SMEs) during the pandemic.
Cofounder and COO Iwan Kurniawan said that Modalku aimed to reach “tens of thousands” of online sellers but would remain selective in the industries it chose to fund.
“We want to support SMEs that have recently gone online or whose online businesses have grown during the pandemic,” he said during a press briefing on Wednesday. “We see an opportunity to fund online SMEs such as those in the health sector, fast-moving consumer goods and ICT [information and communications technology].”
The company’s recent survey of 200 SMEs showed that online sellers were using instant messaging and e-commerce as sale platforms.
As many as 77.5 percent and 70.5 percent of the respondents said they were using e-commerce platform Shopee and Tokopedia, respectively, while 62 percent of sellers also used instant messaging apps such as WhatsApp and LINE.
SMEs, which contribute more than half of the country’s gross domestic product (GDP), have been impacted by the economic downturn caused by the pandemic.
The government aims to have 10 million micro, small and medium enterprises (MSMEs) go digital by the end of the year to help ease the economic burdens caused by the ongoing global health crisis. The plan is intended to increase the proportion of SMEs that have gone digital, which currently stand at around 13 percent of around 60 million small businesses.
Read also: Govt aims for 10 million MSMEs to go digital by year end
The survey also found that 70 percent of respondents said they were interested in utilizing online lending services to help fund business expansion and online promotion.
Modalku’s micro business project manager Yuliana Prabandari said that online SMEs could get loans of up to Rp 250 million (US$17,227) for a 12-month term.
She went on to say that Modalku had been working with e-commerce platforms, namely Shopee, Tokopedia and Bukalapak, to make funding easier to access for online SMEs. Modalku is allowed to use data from e-commerce platforms to assess borrower’s credit scores and risk profile.
“But as we are targeting social commerce sellers as well, we will also analyze borrower risk profiles based on their bank account history in the past three months,” Yuliana said.
She added that the company would target online SMEs in the Greater Jakarta area, as well as Bandung, West Java, and Surabaya, East Java, before gradually expanding.
Modalku reported that it had disbursed Rp 4.1 trillion in loans in the first quarter of the year to more than 2.4 million borrowers.
Despite the pandemic-induced economic slowdown, the company reported that its non-performing loan (NPL) rate was still below 1 percent.
Previously, Tokopedia stated on July 15 that it had around 8.3 million SMEs on its platform, most of which were first-time entrepreneurs.
“Their first business started on Tokopedia,” William Tanuwijaya said during The Jakarta Post’s webinar “Expanding market access for SMEs throughout Indonesia”.
“With a digital platform like Tokopedia, we can expect that more and more SMEs will rise and, with lots of entrepreneurs, lots of jobs will be created.”
