Neobank Becomes the Next KoinWorks Validation, Leads MSMEs to Be “Bankable”

Business p2p loans in Indonesia is slowly entering the adult phase. Meanwhile, equitable access to finance for MSMEs is still an unresolved homework. The latest KoinWorks start working on neobank believe that this solution can help MSMEs slowly level up from the start underserved and underbanked ke bankable.

In a joint interview DailySocial.id, KoinWorks Co-founder & CEO Benedicto Haryono said that as long as they were a company p2p loans, it turns out conversion rate of the business is fairly low, aka below 10% of the total leads who entered. This condition occurs because the MSMEs over financed, have not entered eligible for funding, or are not in need of funding.

The segment that was rejected by KoinWorks actually has potential that can be worked on in the future, considering that the type of loan provided is productive. In other words, they certainly want their business to grow. “We thought how about we give more products general, do not need many requirements. This can be a solution, so that if they need credit, they already have it qualified and can immediately get funding,” said Ben, Benedicto's nickname.

KoinWorks NEO is an integrated financial platform for MSMEs, freelancers, content creator, to start-ups. With NEO Card and financial management services in it, this product enables users to fulfill their business needs. Be it remittance, service payment link to create payment links, monitor financial condition and expense reports, and all the financial literacy assistance business owners need in order to grow their business.

Through KoinWorks NEO, the company provides its own added value that is different from lending. When explored, other MSME issues are financial records that have not been integrated or are still manual, using books or Excel which are done directly by the business owner because of limited resources. In the end, a lot of time was wasted, business owners could not focus on developing their business further.

In more detail, one of the solutions offered through neobank is to provide accounts receivable which is automatically reconciled and equipped with features auto reminder for billing. It is hoped that this solution will make the business owner's time more efficient, even in terms of increasing consumer experience.

"We want to encourage SMEs to start" manage operational, financial and grow with us, before accepting financing from U.S. By providing another experience from the side financial policies more for cater their growth and in line with our vision.”

He continued, the business, which has been helped by KoinWorks throughout its five years of operation, is claimed to have an impact that can be seen from the average sales growth growing well. The number of businesses that have been assisted has reached more than two million loans. "So this neobank validation is part of the mission we implemented from the start that we want to realize more helping MSMEs in Indonesia."

In building KoinWorks NEO, continued Ben, the company took advantage of partnerships with various partners through the BaaS mechanism, not yet Open API. He reasoned that KoinWorks' needs as a company are more specific and customized for MSMEs. Meanwhile, in the Open API solutions that are present in the industry so far there is no specific answer to these needs, it is still limited to consumers.

"So we work together direct only with financial partners and use the features by features relevant to us from Open API players like Finantier, Ayoconnect, and Brick.”

Detailed by Ben, KoinWorks NEO has a financial management service that automatically combines financial activities and money movements; quick and easy access to business loans, for example access to various loans for various purposes, including installment loans, earned wage access (EWA) for their employees.

Finally, the virtual card “NEO Card” which functions as a prepaid and chargedcard supported by Mastercard and BNI to make transactions online easier through the Virtual Card Number (VCN) feature. In addition, the NEO Card can be used to process any local or international payment transfers for free.

Growth engine

As a startup that always pursues growth, in the midst of business growth lending which is no longer exponential, the company will rely on KoinWorks NEO as the engine. Business lending will still be the company's biggest profit-generating engine because it has a large volume, even though its growth only reaches 3%-5% per year.

“But from growth ecosystem transaction data and user base, NEO will be the largest. Because, from there it will grow x percent around 20% -25% of user base NEO that can get financing and there value service which we can give them too.”

The company will also be more aggressive in entering the second and third tier cities, considering that so far it has only entered the main cities. This step will be done through KoinWorks NEO. According to him, amid the slowing growth of the lending business because mature, making market segmentation increasingly formed with their respective specializations.

It is different from the conditions at the beginning where almost all players worked on all financing sectors. These conditions make the public's understanding of a company lending getting tapered. For example, for specific productive loans for women, consumers began to associate with Amartha, there are NATURAL sharia loans, then for MSMEs there are Investree, Modalku, and KoinWorks, and so on.

"Market now know more about the segment lending and know what they are looking for. In the future, penetration must be boosted to tier 2 and 3, while we are still in tier 1 so we need extra effort so that our services can be better. diverse. "

From a managerial point of view, the company added new positions to make it more focused. Among other things, the Strategy Division focuses on creating value and the overall direction of the company, as well as ensuring that KoinWorks will continue to build the Indonesian MSME ecosystem. Then, the Product Division that is fully data-driven will be stronger and sharper in solving complex problems into simpler ones to produce the right products.

Then, the newly formed Platform Division will constantly look at user experience needs, especially MSME players by building an ecosystem that helps them from starting a business to growing beyond MSMEs.

Synergizing with the Product Division and the Platform Division, the Wealth Division is committed to helping KoinWorks users through investment products that are in line with the user's journey to achieve financial goals. Meanwhile, the Marketing Division will maximize KoinWorks in helping users recognize the benefits and ease of accessing digital financial platforms such as KoinWorks.

In five years of operation, the company, which initially only distributed loans to MSMEs, now has a series of products, such as digital gold savings, artificial intelligence (AI) based automated P2P funding, guaranteed financing invoice, financing education funds, early wage access, to the purchase of bonds. Until the beginning of this year, KoinWorks had disbursed Rp11 trillion in funding.