FROM being called вЂworse than loan sharks,вЂ™ to more basic reviews saying that it’s extremely difficult to obtain a loan through the 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 as a free promotional tool that he struggled with the bad publicity at first, but managed to use it.
вЂњWe are actually nine months old, operating fast and doing pretty much. As a startup, you must never be afraid of bad press; you merely should try to learn simple tips to handle it,вЂќ he claims.
UangTeman, or вЂFriendвЂ™s MoneyвЂ™ in English, began operations in April 2015, and it has been growing 20% to 25per cent month-on- month since, in accordance with Aidil.
The services that are financial (fintech) startup dispenses pay day loans to individuals in need: Little, short-term loans to greatly help borrowers endure with regards to their daily requirements until their next paycheque.
Borrowers usually takes around no more than Rp2 million (US$148.60) and at the least Rp1 million (US$74.20) the very first time, but they are charged a 1% rate of interest a day for the following 18 to 25 times.
Even though many look at 1% day-to-day rate of interest as an excessive amount of, Aidil contends that here is the only fee that clients need certainly to deal with вЂ“ there are no management or processing charges.
He maintains the attention price is вЂњrelatively okayвЂќ compared utilizing the danger the faces that are startup day.
вЂњWe aren’t a bank; we try not to gather funds from individuals. The income we provide to the clients comes from our personal вЂfriendlyвЂ™ pockets,вЂќ declares the Singaporean-born previous lawyer.
He additionally stresses that UangTeman just isn’t contending aided by the banking institutions, however with the mortgage sharks and lenders that are informal the marketplace.
вЂњThe loan roof will increase to Rp3.5 million (US$260) together with rate of interest goes down once the debtor shows good credit behavior and has now lent once or twice currently.
вЂњThe almost all individuals in Indonesia are surviving from paycheque to paycheque; when they require extra cash, UangTeman will undoubtedly be there for them, like a pal.
вЂњIt is about making a huge effect вЂ“ it is about building a small business where in the one hand, you are able to cash, yet regarding the other, you could make a good effect on society,вЂќ he adds.
the key challenge for almost any financing company is an extensive history check associated with borrower that is potential. UangTeman will depend on technology with this style of research, relating to Aidil.
вЂњWe have actually our very own technology and algorithms that may perform some background that is initial utilizing plenty of information points,вЂќ he adds.
While stressing that security and privacy will also be crucial for the company, he contends that keeping the lowest amount of non-performing loans is the objective. Plus in this, UangTeman relies greatly regarding the technology it’s built.
Clients will discover away whether their application is approved or otherwise not immediately. If you are authorized, UangTemanвЂ™s operations team will continue steadily to monitor to make sure there’s absolutely no fraudulence.
вЂњOnce everything is authorized, clients will receive the amount of money inside their bank records in three to twenty four hours,вЂќ Aidil promises.
Although the loan quantity will not seem like much, it appears to match the requirements of the prospective market UangTeman is serving.
From the interior study, 30% of its clients are micro business people; 25% utilize the loan for academic function; and around 20% utilize it to pay for medical center and medical bills, relating to Aidil.
Returning to essentials
The theory behind UangTeman would be to provide under-banked people use of financial loans, specially to tiny and short-term loans that may provide their fundamental and needs that are daily.
вЂњThe marketplace is simply individuals who never credit that is own. They will have fundamental bank reports, nevertheless the banking institutions aren’t lending them cash simply because they carry a risk that is highвЂќ says Aidil.
A credit that is recent on MSMEs (micro, tiny and medium enterprises) by industry regulator Bank Indonesia revealed that MSME loans take into account 18.5percent of banking institutionsвЂ™ total credit circulation.
But regarding the total that would go to MSMEs, medium loans make-up 48.1%, little loans have 28.5% share, and micro loans make-up 23.5%. A micro loan is one with no practical minimum up to a maximum of Rp50 million (US$3,718) by Bank IndonesiaвЂ™s definition.
Sustainable business structure
Although UangTeman has guaranteed an undisclosed round that is seed-funding investors such as Alpha JWC Ventures, Aidil claims the business enterprise model is sustainable and therefore the startup may survive without relying heavily on such outside opportunities.
However the seed investment will be needed seriously to measure its operations and achieve more metropolitan areas and suburbs into the national nation, also to start a minumum of one contact centre workplace in each town it operates in.
вЂњWe were money that is making Day One, with this very first clients, and I also think this can be additionally exactly just exactly what attracted our investors,вЂќ Aidil claims.
He additionally contends that the investors had been keen to spend in UangTeman because he could be not through the services that are financial.
You must come from the outside, I believeвЂњIf you want to change and disrupt the financial services industry.
вЂњThat means, it’s possible to see various ways to provide the exact same services and products; interruption can occur as soon as we cross each otherвЂ™s industry,вЂќ he adds.
Aidil claims that UangTeman may likely pursue Series-A money year that is early next claiming it currently has investors ready.
The master plan now could be to teach the marketplace, specially folks from residential district areas, in addition to to start a contact centre workplace in western Java.