KTA Online Tunaiku Service Targets Distribution of More Than IDR 1 Trillion Throughout 2018

Bank Amar's online KTA service "Tunaiku" targets the realization of loan disbursement of more than Rp. 1 trillion this year for 100 thousand customers throughout Indonesia.

The target set is actually almost exceeded when viewed from the company's claimed achievement of Rp700 billion for 70 thousand customers as of mid-May 2018. Overall business growth in Tunaiku grew by an average of 30% per quarter.

"This year we are entering our 4th year. Our mission is to provide credit to people who really need it, not just for consumptive needs," explained Tunaiku CEO Vishal Tulsian to DailySocial.

His party will continue to improve the quality of service so that the application process is getting better seamless pattern and friendly to new customers both on the desktop site and application. Even so, in terms of quality credit scoring to accelerate the distribution of funds, as well as to suppress bad loans so that they are not high.

Personal loan products such as Tunaiku have their own challenges in distribution. Companies must ensure that the intended use must be appropriate, not for consumptive needs. For this reason, the quality when doing credit scoring must be good because the risk is big.

"Team data scientist we build algorithm credit scoring sophisticated so that we simply take advantage of web footprints to assist us in assessing the quality of potential customers."

To apply for a loan at Tunaiku, prospective customers can apply from Rp. 2 million to Rp. 20 million with a tenor of 6-20 months, armed with an ID card only. The interest rate applied is 3% per month (flat), applicable to all customers.

The majority of Tunaiku customers are located in Greater Jakarta and Surabaya (the head office of Bank Amar). When combined, the portion from the two locations reaches 70% of the total customers. Tunaiku is also present in Sidoarjo and Gresik. The contribution from Tunaiku still accounts for less than 30% of the total KTA business portfolio at Bank Amar.

Competition with other fintech lending

As one of the pioneers of fintech lending services in Indonesia, Vishal admitted, his party had a long journey until now people are starting to get to know the fintech industry. Because at that time there were no rules governing the fintech business, especially online lending.

"We are participating with regulators to make rules regarding lending. Because when we presented Tunaiku, fintech was not yet known at all."

It's different now, there are already many fintech players lending operating in Indonesia. Vishal admitted that his party is not worried about this, because from a business model, Tunaiku is in a middle position. Between fintechs that provide loans with daily interest and fintechs that provide loans to SMEs.

According to him, to provide services like Tunaiku has challenges, one of which KTA is classified as an unsecured loan so the risk is big. Indeed, giving a high daily interest is one way that can be done.

This method is considered not to help customers because the installments are burdensome. For this reason, it was decided to apply flat interest for all types of customers, even though they have a bad credit reputation.

"There is no fintech that provides KTA loans with tenors between 6-20 months, that's our position. This is what distinguishes us from fintechs. lending other."

Add partnership with Investree

Vishal, who is also the Managing Director of Bank Amar, added that currently the company has added to its partnership with Investree by becoming a lender from institutions for MSME entrepreneurs.

These efforts aim to increase Bank Amar's credit growth target, particularly productive loans. Prior to signing the partnership with Investree, previously Bank Amar was also a lender for Amartha and Mekar.

"This signing is our proof to the government that in the future digital innovation will have a major impact on the growth of the MSME sector, as well as being able to provide financial encouragement for people who underserved," concluded Vishal.