Investree Will Spin-Off the Sharia Business Unit to Become a Separate Business Entity

Investree discloses that it is separating (spin-off) the sharia business unit becomes a separate company. In the process, Investree has closed Investree Syariah business operations since January 2023. This information has been conveyed to the public through various social media channels.

"Because we want spin-off. According to the new OJK regulations, it must be spin-off," said Investree Co-founder and CEO Adrian Gunadi when contacted DailySocial.id.

He continued, regarding the formation of the Investree Syariah legal entity, it has also been prepared, just waiting for the licensing moratorium to be lifted by the OJK. Later team Existing at Investree Syariah, they have been prepared to lead the company's operations as soon as they receive permission. "Hopefully the OJK can provide space, especially for those that are sharia."

In accordance with the contents of the policy POJK Number 10 of 2022 regarding Information Technology-Based Joint Funding Services, contains important points, one of which is the direction for conventional providers to become providers based on sharia principles.

It was stated that conventional organizers who convert to become operators based on Sharia Principles must first obtain conversion approval from OJK. Later, OJK will give approval or rejection of the application for conversion approval within a maximum period of 20 days after the complete application is received. If approved, the organizer must hold the GMS no later than 60 days from the date of the approval letter from OJK.

The Investree Syariah business unit itself has been around since 2018. There are three types of products offered, namely Invoice Financing, Buyer Financing, and Working Capital Term Loans, aka more or less similar to what is offered for conventional businesses but using sharia principles.

Adrian also revealed that the series D funding that the company was raising some time ago, some of the funds will be directed to building Investree Syariah into a separate company. "It's part of deal JTA [Holdings]."

Unfortunately, he was not willing to specify whether the Series D fundraising had been completed or not. In previously reported news, JTA Holdings has announced its commitment to lead D series round which was originally targeted for completion in January 2023.

After this investment, Investree will expand to Qatar by forming a joint venture. The solutions offered will focus on supply chain financing for MSMEs.

Permit moratorium

As is known, OJK has a moratorium on business licensing lendingsince February 2020. After two years, it was stated that the moratorium would be lifted through the issuance of a new regulation. The draft regulation will later regulate a system that facilitates licensing fintech.

Quoting OJK data, as of January 2023 there were 102 fintech p2p lending who have obtained a permit. This number decreased from the previous 164 companies applying for permits. OJK also noted that almost one-fifth or 22 fintechs were included in the monitoring radar.

The lifting of the moratorium is actually still a matter of controversy in the industry. Quoting from Cash, the number of existing players is currently considered too many. Director Celios Bhima Yudhistira looked at the large number of players fintech Permits are one of the reasons there are still many people trapped in illegal online loans.

People find it difficult to distinguish which is licensed and which is illegal. If the number is small, it is considered that it will be easier for the public to find out which ones are legal. "Ideally there are 10 or 20 fintech companies so that people know that only these companies are legal," he explained.

Moreover, this industry is also not immune from the effects of the pandemic. This is reflected in 21 companies that still have a default rate of 90 days (TWP90) above 5%. TWP90 is a measurement level of bad loans in the p2p lending industry which shows the success rate of customers returning loans within 90 days after they are due. Based on OJK Regulation (POJK) Number 10 of 2022, for the initial stage, OJK will carry out supervisory actions.

Other challenges must also be faced, especially in meeting the capital requirements in accordance with the new regulation. It is stated that companies must have equity of at least IDR 12,5 billion. The time given to comply with this provision is a maximum of three years after the regulation is issued. OJK noted that only 58 companies have met the minimum equity.

According to AFPI, companies that are experiencing this difficulty because they are still recording loss performance. From OJK data, there are still 65 companies with losses out of a total of 102 companies. In addition, this regulation also does not allow for new shareholders within three years from the date the business license is issued by the OJK. That is, the increase in capital during this period can only be from existing investors.

"The association has discussed with the OJK and it looks like in the future there will be a solution to this," said AFPI Head of Law, Ethics and Protection Ivan Nikolas Tambunan.