Debt Funding Scheme Continues to Grow, Amartha Books 704 Billion Rupiah Funds from Lendable

Startups p2p loans Amartha today (24/2) announced the acquisition of funding debt worth $50 million or equivalent to 704,4 billion Rupiah (USD to IDR exchange rate per 14.00 WIB) from Lendable. The focus is on providing capital and financial access to small entrepreneurs empowered by women in Indonesia, along with the "2X Challenge" initiative.

Through this collaboration, Amartha also became the first company in Indonesia to receive 2X Challenge funds. So far in Asia Pacific, the funding initiative for women micro-entrepreneurs has disbursed up to $747 million.

Amartha does have concern more for women entrepreneurs. Presented by Andi Typhoon Garuda Putra as Founder & CEO, women are micro-economic drivers who have an important role in national economic recovery.

The segment of women micro entrepreneurs who do not have access to banking and financial institutions in Indonesia is estimated at more than 22 million people. By providing access to capital and entrepreneurship education to women, Amartha noted that Mitra Amartha can increase income 2 to 7 times in one year.

"We are grateful to be given the trust from Lendable to realize the 2X Challenge in Indonesia so that women can increase their role in the Indonesian economy, especially in the context of post-pandemic recovery," said Taufan.

A combination of retail and institutional financiers

In a separate interview, Taufan said that so far they have distributed funds of up to 3,22 trillion to 616 thousand partners in Java, Sulawesi and Sumatra. The combination of retail lenders (community) and institutions also encourages the performance and penetration of Amartha's services.

"by" year on year the comparison is 55% institutional and 45% retail. For retail lenders, 68% are dominated by millennials, followed by 19% by Generation X, 10% by Generation Z, and 3% by Generation Z. baby boomers. Based on the amount of funding value, 44% is dominated by generation X, then 40% by millennial generation, 10% baby boomers, and 3% of Generation Z," explained Taufan.

In terms of institutional partners, Amartha has also collaborated with banks and financial institutions to channel funding with schemes channeling including Bank BRI, Bank Mandiri, Bank Jatim, Bank Permata, Bank Ganesha, Indosurya, and so on.

Targeting women micro-entrepreneurs certainly provides a higher level of risk (return). It will be interesting to know Amartha's strategy in increasing the percentage of TKB90 on its platform.

"Amartha has tightened up monitoring portfolio, operations, risk, and audit. This aims to screen Partners with the best quality, while maintaining the quality of ongoing loans. In addition, Amartha has updated the system credit scoring and incorporate ability assessment (abilities), will (willingness), and history of payment refunds before the Covid-19 pandemic," added Taufan.

Amartha also provides direct business assistance by the field team, including providing alternative business training for partners whose businesses are affected by the pandemic, so they can start new businesses or expand their businesses. It is claimed, these efforts are able to make the business climate in the Amartha partner ecosystem back to normal as before.

Funding debt in Indonesia

Previously last year Lendable also joined as Actioncalendar institutionCoinWorks, disbursed $10 million. Apart from Lendable, there are several other institutions that also provide similar funds for in Indonesia, for example Accial Capital for Pintek, Cloud Cash, and Investree. In addition, there are GMO Payment Gateway (Investree), Partners for Growth (Kredivo), etc.

Actually, there are two schemes that are widely applied to channel funds from institutions, namely: loan channeling and venture debt. The first scheme is intended for institutions such as banks to channel credit funds to MSMEs through fintech lending. Many local banks are starting to announce their entry into the ecosystem fintech through this collaboration. Recently, there is BCA that disburses funds through iGrow.

While venture debt/funding debt In fact, it is more strategic in nature, such as to finance operations and growth – usually comes in conjunction with equity funding from venture capitalists. But not a few who use the funds given to be redistributed.

Apart from those already mentioned, fintech others who have received funding debt is Natural, Digiasia, Kredivo, Modalku, UangTeman, Acceleration, and People's Capital.