MSMEs Need Funds, Here's How To Get Quick Loans From People's Capital

Currently, development MSMEs (micro, small and medium enterprises) in Indonesia is growing rapidly. In developing their business, MSME actors certainly need modal sufficient.

These two things are the triggers for the mushrooming financial technology or fintech loan-based, to support MSMEs.

Based on data from the OJK (Financial Services Authority) 2021, there are 103 providers fintechpeer-to-peer lending registered with the OJK. One of them is People's Capital.

Overview of People's Capital

People's Capital is a money-borrowing service that brings together MSMEs as borrowers and the community as lenders. Until now, Modal Rakyat has disbursed loans to more than 75 thousand borrowers, the majority of whom are SMEs.

“We offer safe online funding alternatives. We want to provide solutions for MSMEs who want to get loans in a practical, fast and easy way so that they can help Indonesia's economic development," wrote Modal Rakyat on its official website.

Limits and Interest on Loans for MSMEs

So far, the People's Capital offers loans ranging from 500 thousand to 2 billion. However, the amount of the loan granted will be adjusted to the size of the prospective borrower's business.

For MSMEs, loans can start from 500 thousand to 10 million rupiah. Meanwhile, for SMEs (small and medium enterprises) or larger, loans can start from 100 million to 2 billion rupiah.

Meanwhile, loan interest will be adjusted to the level of business risk of the prospective borrower. The level of risk is determined based on the data provided by the prospective borrower. The amount starts from 12% to 30% per year.

"We are an aggregator platform. So, the interest we charge the borrower is the interest received by the lender on our platform, peer to peer. The loan interest in People's Capital is an average of 15 percent per year," explained Hendoko.

In addition to loan interest, there is a service fee that is also charged when borrowing from People's Capital. The amount is 3% of the total loan taken.

Terms of Being a Capital Borrower

Launching the official website of Modal Rakyat, the main and most basic requirement to become a borrower at Modal Rakyat is that you are an Indonesian citizen. Also, have complete identity, NPWP (taxpayer identification number) and bank account.

In addition, the CEO of Modal Rakyat Hendoko Kwik also explained several other conditions. He said, usually, his party requires prospective SME borrowers to have been running for at least two years. Whether it's for companies in the form of CV or PT.

“Next, his business must have cash flow positive ones, or by calculation, their finances are able to bear the interest costs of the loan," concluded Hendoko to Trikinet.com.

Then, prospective MSME borrowers must already have the relevant business license. Also, have corporate legality. For MSMEs, legality requirements can use one of the following: SIUP (trading business license), business location permit or TDP (company registration certificate).

“However, when it comes to SMEs (in the sense that businesses are bigger than MSMEs), which have more than 20 employees, the legal requirements are different. Usually more complete,” said Hendoko.

There is also a more complete legality in question, including: company deed, SIUP, TDP, and company NPWP. Everything is included, no longer optional.

Things to Prepare and Avoid Before Borrowing Capital

Prepared:

Before providing a loan, the People's Capital will check in detail on the borrower.

• First, checking the initial conditions. For example, checking the completeness of the identity and legality of the company.
• Second, the People's Capital will also look at the financial analysis of the prospective borrower's company.

Starting from a checking account showing business turnover for the last six months. Until, examples of documents used for business or trade.

“For example, such as invoices, trade notes. Well, that usually refers to financial documents. That is what prospective borrowers have to prepare,” said Hendoko.

Not only that, it is important for prospective borrowers to determine through what kind of loan will be submitted. According to Hendoko, there are several ways to apply for a loan from the People's Capital.

"It can be through the digital ecosystem in collaboration with Modal Rakyat, submit directly through our official website, or directly contact our Relationship Manager," he explained.

For information, Modal Rakyat cooperates with other fintech platforms, which have a B2B2B or B2B2C approach. Such as, Fazzcard, Payfazz Master Agent and Rata.

Avoid:

Meanwhile, Hendoko also revealed several problems that are often experienced by MSMEs when they want or are having a loan in People's Capital. According to him, these things can be avoided before applying for a loan.

• First, do not complete the administrative requirements.

Hendoko admitted, the problem that is often encountered is that prospective SME borrowers do not yet have a complete business license, even none at all. Some of them don't even have an NPWP. Usually, the People's Capital will provide education to them.

Even so, the People's Capital will continue to disburse loans, if they have digital data on prospective borrowers. For example, have or are actively using the Modal Rakyat partner application, for at least six months.

"Even though we don't have a business license, if we have data from partners, for example Payfazz, we will usually tolerate it. We will relax the screening requirements and still be able to disburse the credit," said Hendoko.

• Second, reluctant to continue the installments.

According to Hendoko, sometimes there are SMEs who give up quickly. When their business has problems, they are often reluctant to continue their business. As a result, they are also reluctant to continue the installments.

"This is not allowed, because it involves trust levels or level of confidence. It should be noted that the funds they borrow come from lenders. Actually, in continuing the business, ups and downs are part of the process,” said Hendoko.

Steps to Disburse Loans

After knowing a series of information related to fintech background, requirements, and other important things to know, make sure MSME actors are really sure before applying for a loan.

After making sure, here are some steps that must be taken by MSME actors, before getting a capital loan from People's Capital.

• First, register as a borrower on the official website of the People's Capital, at the following link: https://www.modalrakyat.id.
• Next, select the Apply Loan option.

• Then, you will be asked to fill in your personal data. After that, there will be a verification request via the registered phone number.

• Second, after the account is registered and verified, MSME actors can immediately apply for a loan at People's Capital.

The loan application process itself is done completely online. The time needed to complete the application is also only around 15 minutes.

• Third, wait for approval from the People's Capital.

At this stage, the People's Capital will conduct a survey, analysis and determination of the level of risk or interest on the loan. The time required for completion is a maximum of five working days.

• Fourth, the People's Capital will raise funds on its website. Only after that, the lender will provide a loan.
• Fifth, after the fundraising has been successfully collected according to the borrower's request, the funds can be disbursed to the borrower's account.
• Finally, the borrower can start repaying the loan. Make sure to return the loan before or when it is due.