Investree Immediately Expands to Vietnam and Launches Sharia Financing

After receiving an official registration certificate from the OJK, peer-to-peer lending company Investree announced that it would soon expand to Vietnam next year by establishing a joint venture subsidiary with local partners from the country.

Co-founder and CEO investree Adrian Gunadi said that in terms of regulation, he admitted that he was not hampered by reciprocal rules as generally happens when a bank wants to open a branch abroad. Under these conditions, regulators from both countries must make a mutual agreement to open pintu before the banking of each country's regional expansion officially.

"From our side, it is not subject to regulation because what appears is not the name Investree but a local name. Moreover, reciprocity is more towards banking, while fintech is borderless, "he explained, Thursday (15/6).

As for the identity of the partner to be partnered with the company, the identity is still kept secret. Adrian only said that the partners came from financial companies that understand the market conditions there. Currently, the establishment of the subsidiary is still in the process, targeted to be inaugurated next year.

"So later we will be the platform provider, while local partners will be the players because they understand the market. This is exciting, we will get a lot of picture about Vietnam, we can also get data."

Launch Islamic financing

In addition to announcing its inaugural regional expansion plan, Investree will also launch sharia-based financing. It is planned that this unit will start operating at the end of July 2017.

Investree Syariah will be accessible on the main Investree website. The company is currently processing a certification permit from the National Sharia Council (DSN).

Adrian said the plan to launch this business unit was carried out due to requests from the lenders and borrowers. According to him, there have been commitments from three SMEs to become borrowers who are willing to become pilot projects at launch. As for the location, one UKM is from Surabaya and the other two are from Jakarta.

Meanwhile, from the funding side, the company has received commitments from various parties. One is from overseas, one represents an individual from Singapore and one is from an insurance company institution located in Japan.

These two foreign funders, explained Adrian, are allowed in POJK No. 77. There it is said that the provider company can attract foreign financiers to support the development of the sharia p2p fintech industry.

"Currently, the certification permit process is still being submitted to the DSN. This is in accordance with the direction of the OJK. When we met them, they said that since this has not been regulated by the regulator, it is better to proceed directly to the DSN."

later contract (agreement) to be used in Investree Syariah using a contract wakalah bill ujrah, with a commission sharing scheme or better known ujrah. In the contract there is an agreement to transfer the authority or power of attorney to another party to carry out a certain work for the benefit of the first party.

With the launch of this business unit, Adrian hopes to increase the potential of Islamic financial services in Indonesia, which is still underdeveloped compared to conventional businesses.

Islamic finance players are still constrained in four, namely: pricing expensive, conventional services far from the element of innovation, limited branch offices, and limited human resources.

"These four challenges are still causing the Islamic finance business in Indonesia to be underdeveloped. With fintech, we will test the market response by providing various similarities in terms of products, pricing, access, the structure is also the same as conventional. We make it no different because the source of funds is the same," concluded Adrian.

Since its establishment a year ago, Investree has disbursed loans of IDR 214 billion for 626 SMEs. The amount of loans that have been disbursed is IDR 160 billion, then loans that have been paid off are IDR 121 billion.

The average yield received by lenders is 17,4%. Meanwhile, the average time to be funded since the application is submitted is three days. As for bad credit, there is no claim or 0%.

The company targets by the end of this year to be able to disburse loans of Rp. 400 billion. Not only that, the company also has ambitions to expand to several cities in Java. The first city to be immediately visited was Semarang.

To support the target, Investree is ready to add two new products, namely: seller financing targeting e-commerce SMEs and merchant cash advance, a product pre-invoice loan intended for corporations.