IFC Collaborates with Amartha to Distribute Capital Loans of IDR 3 Trillion to Female Ultra Micro Entrepreneurs
The value provided is greater than the application announced in March 2023 for a total of $175 million ($25 million from IFC and $150 million from IFC partners)
International Finance Corporation (IFC) announced its commitment to channel productive capital through a network of ultra-micro entrepreneurs in Amartha. The funds disbursed by the World Bank member financial institutions were worth $206 million or around 3 trillion Rupiah. This value is greater than that proposed in March 2023, namely $175 million.
In the prospectus application for funds debt last March, IFC committed $25 million in funding and unlocked additional $150 million in joint funding from partners. The proposed investment is a senior tranche of asset-backed securities (senior tranche of asset backed securities) which was formed to collect loan receivables, will later be used to increase access to finance for ultra-micro entrepreneurs, especially women entrepreneurs.
Amartha Founder & CEO Andi Taufan Garuda Putra explained, "Funding from IFC not only helps Amartha to expand its investor base on an international scale, but also expands digital financial services to various remote areas in Indonesia. Amartha believes this collaboration will create a sustainable impact."
Taufan also explained that currently there are more than 20 thousand MSMEs receiving capital distribution from Amartha. They also have a special commitment to reach entrepreneurs outside Java (70% of channeled capital is outside Java). Accumulatively, Amartha has distributed capital of more than 12 trillion Rupiah to 1,7 MSMEs from 42 thousand villages in Indonesia.
In distributing funding, Amartha also includes a dedicated team to help them maximize their business through various assistance and training. Amartha implements a joint responsibility system to anticipate and minimize the occurrence of payment defaults. Specifically they develop own credit scoring system, adjusting to the demographics of the borrowers.
IFC APAC Regional Vice President Riccardo Puliti said, "The gap in access to capital faced by women ultra-micro entrepreneurs in Indonesia – which is very important for the economy as a whole – is widening due to COVID-19 which causes women to have to bear the burden of household and childcare pressures "which has become even greater during the pandemic. This collaboration is a win for women and a win for the economy."
IFC itself is not the first time it has participated in funding (both equity and debt) for digital companies in Indonesia. Previously they also injected funds into the parent company AnterAja, Evermos, Kitabisa, AwanTunai, eFishery, and PasarPolis. IFC is also one of the LPs for funds managed by AC Ventures.
This year, precisely in June 2023, Amartha also just announced a similar credit facility to be distributed to MSMEs. The value is $100 million (more than 1,4 trillion Rupiah), sourced from Community Investment Management which is a social impact-oriented financial firm from San Francisco.