News of Amartha's Plan to Acquire Bank Victoria Syariah and the Strategic Potential Behind it

Almost a week after it was reported that he would acquire Bank Victoria Syariah, Amartha has yet to confirm this. Previously, Deal Street Asia reported that this P2P startup for micro women entrepreneurs will take over 70% of shares owned by Bank Victoria Syariah.

DailySocial.id have tried contacting the CEO and Founder Amartha Andi Taufan to confirm the acquisition. However, there has been no confirmation until this news was revealed.

Quoting Dataword, Andi neither denied nor confirmed the news of the acquisition. She said that she was focusing on accelerating loan disbursement to women entrepreneurs by digitizing financial services for partners and individual financiers through features through crowdfunding.

Meanwhile, since its inception in 2010, Amartha has strengthened its commitment to provide access to capital, especially for women entrepreneurs who have been included in the unbanked and underbanked.

As of now. Amartha has distributed business capital of Rp61,7 trillion to 1.032.959 micro women entrepreneurs with a total TKB90 of 97,16%.

Acquisitions, digital banks and loan acceleration

Contacted separately, Director of the Center of Economic and Law Studies (Celios) Bhima Yudhistira revealed that many small banks were acquired by startups at low prices because they could not meet the minimum capital requirements set by the OJK.

In the above context, Bank Victoria Syariah is known to be adding capital to comply with OJK regulations regarding core capital of IDR 3 trillion. As of September 2021, Bank Victoria Syariah only has a core capital of around IDR 256,6 billion.

"Fintech enter [through acquisition] to help capitalize so the bank can survive. It does not even rule out the possibility of this bank being changed into a digital bank," said Bhima.

If you look at previous acquisitions, most of these small banks were acquired and changed their identity with new branding. Another reason is that small banks do not have large infrastructure, branch offices and customers, making them easier to transform. For example, Artos Bank becomes Jago Bank and Bank Yudha Bhakti became Neo Commerce Bank.

What needs to be highlighted, said Bhima, is the trend of small bank acquisitions by P2P startups allowing them to offer higher loan ceilings to customers. The reason is that the OJK regulates loan limits  a maximum of IDR 2 billion. 

"Fintech can't keep hoping on Actioncalendar retail because the interest costs given are quite expensive. Meanwhile, funding fintech sourced from institutional lenders limited by OJK. Therefore, fintech acquire a bank so that funding sources from bank customer deposits can encourage loan disbursement fintech," he explained.

In the overall picture, the above corporate actions lead to the same mission, which is to encourage financial inclusion in the segment underbanked and unbanked. Banks have difficulty pushing loans to the micro segment because operating costs are too high. Temporary, fintech a lot of working on the micro segment. 

"Fintech and banks need each other. For example, the OJK Financial Information Service System (SLIK) will focus more on banking. Temporary, fintech need accuracy of data on prospective debtors in OJK SLIK, to control the risk of bad loans," he added.

Based on reports ministry of cooperatives and SMEsCurrently, there are 64,19 million MSMEs in Indonesia, of which 99,92% are businesses in the micro and small segments. Of this total, around 34% of medium-sized businesses are run by women, while 56% of small businesses and 52% of micro-enterprises are owned by women.

Take the quiz and challenge #NgabubureaDS on Instagram @dailysocial.id during the month of Ramadan, which will distribute prizes every week in the form of takjil, hampers to subscriptions to DailySocial.id premium content for FREE. Check out more info HERE and keep an eye on our weekly quiz HERE.