Let me make it clear about tiny loans to

Let me make it clear about tiny loans to

FROM being called ‘worse than loan sharks,’ to more basic reviews saying that it really is extremely difficult to obtain a loan through the web web site, UangTeman is surviving, and even, apparently thriving.

Talking recently to Digital Information Asia (DNA) in Jakarta, its cofounder and ceo Aidil Zulkifli (pic above) admits he struggled with all the bad publicity to start with, but were able to make use of it as a free of charge marketing device.

“We are actually nine months old, operating fast and doing pretty much. Being a startup, you shouldn’t be scared of bad press; you simply should find out simple tips to handle it,” he claims.

UangTeman, or ‘Friend’s cash’ in English, began operations in April 2015, and has now been growing 20% to 25per cent month-on- thirty days since, relating to Aidil.

The services that are financial (fintech) startup dispenses pay day loans to individuals in need: Little, short-term loans to simply help borrowers endure for his or her day-to-day requirements until their next paycheque.

Borrowers takes as much as no more than Rp2 million (US$148.60) and no less than Rp1 million (US$74.20) the very first time, but are charged a 1% rate of interest each day for the following 18 to 25 times.

Even though many start to see the 1% daily rate of interest as way too much, Aidil contends that this is actually the only cost that clients need certainly to deal with – there are no management or processing costs.

He keeps the attention price is “relatively okay” compared utilizing the danger the startup faces every day.

“We aren’t a bank; we usually do not gather funds from individuals. The funds we lend to your clients arises from our own ‘friendly’ pockets,” declares the Singaporean-born lawyer that payday loans open sunday in Edina Missouri is former.

He also stresses that UangTeman is certainly not contending aided by the banking institutions, however with the mortgage sharks and casual loan providers in the marketplace.

“The loan roof will increase to Rp3.5 million (US$260) in addition to rate of interest is certainly going down once the debtor shows good credit behavior and contains lent once or twice already.

“The greater part of individuals in Indonesia are surviving from paycheque to paycheque; like a friend if they need extra money, UangTeman will be there for them.

“It is about making a large effect – it is about building a small business where regarding the one hand, you are able to cash, yet on the other side, you possibly can make a good effect on society,” he adds.


the primary challenge for just about any financing company is a comprehensive history check of this possible borrower. UangTeman will depend on technology with this type of homework, based on Aidil.

“We have actually our personal technology and algorithms which will perform some background that is initial making use of plenty of information points,” he adds.

While stressing that security and privacy will also be crucial for the company, he contends that keeping a decreased standard of non-performing loans could be the objective. As well as in this, UangTeman relies greatly regarding the technology this has built.

Clients will see away whether their application is authorized or perhaps not instantly. If you are authorized, UangTeman’s operations group shall continue steadily to monitor to make sure there’s absolutely no fraudulence.

“Once everything is authorized, clients will get the amount of money within their bank records in three to a day,” Aidil promises.

Although the loan quantity will not seem like much, this indicates to suit the requirements of the mark market UangTeman is serving.

From the interior study, 30% of the customers are micro business people; 25% make use of the loan for academic function; and around 20% utilize it to cover medical center and medical bills, relating to Aidil.

Back once again to rules

The concept behind UangTeman was to provide under-banked individuals use of lending options, specially to little and short-term loans that will serve their fundamental and day-to-day requirements.

“The target audience is simply individuals who cannot credit that is own. They will have fundamental bank reports, however the banking institutions aren’t lending them cash simply because they carry a risk that is high” says Aidil.

A current credit history on MSMEs (micro, tiny and medium enterprises) by industry regulator Bank Indonesia indicated that MSME loans account fully for 18.5percent of banking institutions’ total credit circulation.

But associated with the total that goes to MSMEs, medium loans make-up 48.1%, small loans have 28.5% share, and micro loans compensate 23.5%. By Bank Indonesia’s meaning, a micro loan is certainly one without any practical minimum as much as at the most Rp50 million (US$3,718).

Sustainable business structure

Although UangTeman has guaranteed an undisclosed seed-funding round from investors such as Alpha JWC Ventures, Aidil claims the company model is sustainable and that the startup might survive without relying greatly on such outside opportunities.

However the seed investment will be needed seriously to scale its operations and achieve more towns and suburbs within the national nation, also to start a minumum of one contact centre workplace in each town it runs in.

“We have already been earning profits from Day One, with this very first clients, and I also think this will be additionally just just just what attracted our investors,” Aidil claims.

He additionally contends that the investors had been keen to spend in UangTeman because he could be maybe not through the monetary solutions industry.

“If you need to alter and disrupt the monetary services industry, you have to originate from the exterior, I think.

“That way, it will be possible to see various ways to provide the exact same services and products; interruption can occur once we cross each industry that is other’s” he adds.

Aidil claims that UangTeman would probably pursue Series-A money year that is early next claiming it currently has investors prepared.

The program now could be to coach the marketplace, specially folks from residential district areas, along with to open a contact centre workplace in western Java.