Book Pre-Series A Funding, Fairbanc Expands Network of Distributor Partners and Technology Team in Indonesia

Startup steps fintech Fairbanc for expansion to Indonesia is getting more aggressive. Moreover, they have again booked new funding for the pre-series A stage. Several investors involved include ADB Ventures, Accion Venture Lab, East Ventures, and Sampoerna Strategic Group.

This new funding was obtained after Fairbanc received an undisclosed nominal investment from 500 Startups and Indonesian billionaire Michael Sompoerna earlier this year to expand its business reach to Indonesia.

In its official statement, the company said it would carry out scale up loans to MSME actors in Indonesia who have limited access to working capital. Previously, the World Bank estimated that the unmet credit needs of MSMEs in Indonesia would reach $166 billion.

Accion President & CEO Michael Schlein said, micro merchants are the segment most vulnerable to the economic impact, especially in the situation of the Covid-19 pandemic which will last for a long time. "Fairbanc can fill the gap in access to credit for business actors. That way, they can still operate their shops and maintain their livelihoods," he said.

Meanwhile, ADB Ventures Senior Fund Manager Daniel Hersson added, Fairbanc has a unique and different position in the microenterprise inventory financing market. His involvement in this funding will help Fairbanc to accelerate Indonesia's financial inclusion and support climate resilience in the Asia Pacific region.

Business expansion to Indonesia

Fairbanc's Founder & CEO Mir Haque revealed that this new funding will be used to expand the network of distributor partners to strengthen its technology team in Indonesia. Currently, Fairbanc loan access has been connected at 60 thousand merchant. A number of consumer brands These major merchant networks include Unilever, L'oreal, and Danone.

His party is also developing a product recommendation system that can help planning inventory for merchant when there is a natural disaster where Indonesia is a country prone to natural disasters.

"Through this loan, we can help merchant that unbanked and underbanked to boost revenue growth by increasing inventory businessmen. Since 2019, Fairbanc through merchants This has helped MSMEs to drive sales up to 35% by reducing the NPL ratio to almost zero," said Haque.

Fairbanc is working with a large FMCG company to offer "Buy Now Pay Later" productive loans to 10 retailers without the need to apply through smartphone. Fairbanc uses credit scoring AI-based that can help process loans microcredit instantly.

With a system that is integrated into various brandconsumer, Fairbanc can access orders merchant and track record of payments. Companies can further utilize this data to perform underwriting loans and boost sales merchant while keeping operating costs low.

In previous reports, Fairbanc said that it has a slightly different business model from others. Fairbanc makes money by optimizing direct cash payments to distributors and using discounts from sales volumes. That way, micro merchants are not charged with interest and additional fees from FMCG merchants and their distributors.

A similar concept has actually been accommodated by several fintech in Indonesia through services invoice financing. To maximize potential paylater for business people, Investree recently too launching a similar new product, in collaboration with Andalin. Beyond that there is AwanTunai and several other players who are also trying to facilitate the same needs.