FROM being called вЂworse than loan sharks,’ to more basic reviews stating that it’s extremely difficult to obtain that loan through the web web web site, UangTeman is surviving, as well as, apparently thriving.
Talking recently to Digital Information Asia (DNA) in Jakarta, its cofounder and ceo Aidil Zulkifli (pic above) admits as a free promotional tool that he struggled with the bad publicity at first, but managed to use it.
“We are actually nine months old, operating fast and doing pretty much. As being a startup, you must never be scared of bad press; you merely should find out how exactly to manage it,” he claims.
UangTeman, or вЂFriend’s Money’ in English, began operations in 2015, and has been growing 20% to 25% month-on- month since, according to Aidil april.
The monetary services technology (fintech) startup dispenses pay day loans to individuals in need of assistance: tiny, short-term loans to greatly help borrowers survive because of their day-to-day needs until their next paycheque.
Borrowers usually takes around a optimum of Rp2 million (US$148.60) and at the least Rp1 million (US$74.20) the very first time, but they are charged a 1% rate of interest each day for the following 18 to 25 times.
Even though many start to see the 1% day-to-day rate of interest as excessively, Aidil contends that this is actually the only fee that customers need certainly to deal with – there are no management or processing charges.
He keeps the attention price is “relatively okay” compared aided by the danger the startup faces every day.
“We aren’t a bank; we try not to gather funds from individuals. The cash we provide to the clients arises from our personal вЂfriendly’ pockets,” declares the Singaporean-born previous lawyer.
He additionally stresses that UangTeman just isn’t contending because of the banking online payday GA institutions, however with the loan sharks and lenders that are informal the marketplace.
“The loan roof will increase to Rp3.5 million (US$260) and also the interest goes down as soon as the debtor shows good credit behavior and contains lent several times currently.
“The greater part of individuals in Indonesia are surviving from paycheque to paycheque; when they require more money, UangTeman may be here for them, like a pal.
“It is about making a large effect – it is about building a small business where in the one hand, you could make money, yet regarding the other, you possibly can make a good effect on society,” he adds.
Research
the key challenge for just about any financing company is a comprehensive history check of this borrower that is potential. UangTeman depends upon technology with this style of due diligence, based on Aidil.
“We have actually our very own technology and algorithms that may perform some background that is initial utilizing plenty of data points,” he adds.
While stressing that security and privacy will also be crucial for the company, he contends that keeping a decreased degree of non-performing loans may be the objective. As well as in this, UangTeman relies greatly in the technology it offers built.
Clients will discover away whether their application is authorized or otherwise not immediately. If you are authorized, UangTeman’s operations group shall continue to monitor to make certain there’s absolutely no fraudulence.
“Once everything is approved, clients will get the amount of money in their bank reports in three to twenty four hours,” Aidil promises.
Although the loan amount will not seem like much, this indicates to match the requirements of the mark market UangTeman is serving.
From the interior study, 30% of their clients are micro business owners; 25% make use of the loan for academic function; and around 20% utilize it to pay for medical center and medical bills, relating to Aidil.
Back again to rules
The theory behind UangTeman would be to provide under-banked individuals use of lending options, particularly to tiny and short-term loans that may provide their fundamental and day-to-day requirements.
“The target audience is actually those who never credit that is own. They usually have fundamental bank reports, nevertheless the banking institutions aren’t lending them cash simply because they carry a risk that is high” says Aidil.
A credit that is recent on MSMEs (micro, little and medium enterprises) by industry regulator Bank Indonesia indicated that MSME loans take into account 18.5percent of banking institutions’ total credit circulation.
But for the total that would go to MSMEs, medium loans make-up 48.1%, little loans have 28.5% share, and micro loans make-up 23.5%. By Bank Indonesia’s meaning, a micro loan is just one without any practical minimum up to at the most Rp50 million (US$3,718).
Sustainable enterprize model
Although UangTeman has guaranteed an undisclosed seed-funding round from investors such as Alpha JWC Ventures, Aidil claims the company model is sustainable and therefore the startup might survive without relying greatly on such outside opportunities.
However the seed investment will be needed seriously to measure its operations and achieve more metropolitan areas and suburbs within the national nation, also to start one or more contact centre office in each town it operates in.
“We have now been earning money from Day One, with your very very very first clients, and I also think this really is additionally just just what attracted our investors,” Aidil claims.
He additionally contends that the investors had been keen to spend in UangTeman because he could be perhaps perhaps not through the services that are financial.
“If you need to alter and disrupt the economic solutions industry, you need to result from the surface, i really believe.
“That means, you’ll be able to see various ways to supply exactly the same items; interruption sometimes happens once we cross each industry that is other’s” he adds.
Aidil says that UangTeman would probably pursue Series-A money year that is early next claiming it currently has investors prepared.
The master plan now could be to teach the marketplace, particularly individuals from residential district areas, along with to open up a contact centre workplace in western Java.