Modalku Facilitates "Project Capital" for Government Procurement

my capital launched a Project Capital service that facilitates additional funding for companies or e-catalogue vendors and LPSE (Electronic Procurement Services).

Modalku Country Head Arthur Adisusanto said procurement was one of the areas that underwent significant transformation. LPSE is considered to have revolutionized the traditional procurement process. In Indonesia, the government spending budget has increased this year compared to the previous year, amounting to IDR 3.061 trillion.

The large potential for funding in the government procurement sector is one of the reasons Modalku presents Project Capital products. This is an alternative funding without collateral for e-catalog and LPSE companies or vendors when carrying out projects from the government. The nominal funding offered is up to IDR 1,5 billion with a flexible tenor of up to 120 days according to the project payment deadline.

"In 2023 we will start trying to enter certain industries that we feel have potential and are growing rapidly. One of them is Project Capital, where we see that there are many procurement projects. For MSME players who win the LPSE, they can have the opportunity to get additional capital from Project Capital. in Modalku," Arthur told the media in the halal bihalal event (16/5).

Several requirements for MSME players who win the LPSE tender want to apply for additional capital in Project Capital. First, the business must be in the form of a PT or CV. Then, operating for about a year and already registered as one of the vendors from LPSE.

Currently, the Modalku Group has channeled funding of IDR 48 trillion to more than 5,1 million MSME transactions in Indonesia, Singapore, Malaysia, Thailand and Vietnam. This distribution figure is considered quite stable with a growth of more than 40% compared to the same period the previous year. Modalku also said that it was able to maintain the quality of its funding with a success rate of refund (TKB90) as of 30 April 2023 at the level of 95,70%.

"Various recovery efforts are carried out by maintaining the quality of funding and carrying out optimal billing to avoid default funding status. For funding transactions that have defaulted status, communication with beneficiaries continues to be carried out by offering a restructuring process. On the other hand, the process of submitting claims to insurance also run for several other funding transactions," said Arthur.

Support sustainable business

In recent years, the principles of Environment, Social and Governance (ESG) have begun to be implemented as a framework for the startup industry in Indonesia. ESG demonstrates a company's commitment to sustainability and responsible business practices.

Previously, the ESG risk assessment had gone in credit assessment MSMEs in Modalku. This year, Modalku has decided to focus more on supporting MSMEs that implement ESG. MSMEs that meet the ESG criteria have the opportunity to receive funding from various partners, ranging from institutions, foreign funding, to green funds who want to find exposure to Indonesia.

"ESG practices in the Modalku Group have been integrated with the main business. One of them is with ESG risk assessment into the process credit assessment beneficiary. This assessment considers the environmental and social risks of potential beneficiaries based on the ESG risk assessment framework in Modalku," said Modalku Group Sustainability & ESG Lead Annette Aprilana.

His party did not rule out the possibility of a potential portfolio Existing Modalku gets priority for channeling ESG funds, as well as for MSME players who have just implemented ESG value can register.

"Portfolio Existing Capital is certainly our priority. However, Modalku focuses on giving working capital for those with ESG value. We don't provide incentives, but we bridge related institutions and MSME players who have ESG values ​​to get capital," said Arthur.

Modalku also launched a campaign titled #WujudkanMasaDepan where recipients of funds can potentially get business capital of up to IDR 2 billion from individuals or institutions seeking funding) through the digital market. Apart from Indonesia, Modalku also operates in Singapore, Malaysia, Thailand and Vietnam under the name Funding Societies.

"The presence of funding facilities, such as Project Capital, as well as education regarding the importance of implementing ESG for the sustainability of the MSME business, is expected to support business people, both expanding and adding business lines." Close AVP Brand and Communications Modalku Errik Jaya Tirta.