- Fintech startup UangTeman survives storm of bad publicity to secure funding that is undisclosed
- Dispenses little, short-term loans to greatly help people endure until their next paycheque
FROM being called вЂworse than loan sharks,вЂ™ to more basic reviews saying that it really is extremely difficult to have 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. Being a startup, you shouldn’t be scared of bad press; you merely should find out how exactly 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- thirty days since, in accordance with Aidil.
The services that are financial (fintech) startup dispenses payday advances to individuals in need of assistance: Little, short-term loans to greatly help borrowers endure for his or her day-to-day requirements until their next paycheque.
Borrowers may take as much as no more than Rp2 million (US$148.60) and at the least Rp1 million (US$74.20) the time that is first but are charged a 1% interest a day for the following 18 to 25 times.
Even though many start to see the 1% day-to-day rate of interest as way too much, Aidil contends that here is the only cost that clients have to deal with вЂ“ there are no management or processing charges.
He keeps the attention price is вЂњrelatively okayвЂќ compared aided by the danger the faces that are startup day.
вЂњWe aren’t a bank; we try not to gather funds from individuals. The amount of money we lend to your clients arises from our personal вЂfriendlyвЂ™ pockets,вЂќ declares the Singaporean-born previous lawyer.
He additionally stresses that UangTeman just isn’t contending with all the banking institutions, however with the mortgage sharks and casual loan providers in the marketplace.
вЂњThe loan roof will increase to Rp3.5 million (US$260) in addition to rate of interest goes down as soon as the debtor shows good credit behavior and contains lent several times currently.
вЂњThe majority of individuals in Indonesia are surviving from paycheque to paycheque; like a friend if they need extra money, UangTeman will be there for them.
вЂњIt is focused on making a huge impact вЂ“ it is about building a small business where in the one hand, you could make cash, yet on the other side, you could make a confident effect on society,вЂќ he adds.
the primary challenge for any financing company is a comprehensive back ground check of this borrower that is potential. UangTeman is determined by technology for this style of homework, based on Aidil.
вЂњWe have actually our very own technology and algorithms that may perform some background that is initial making use of plenty of information points,вЂќ he adds.
While stressing that security and privacy will also be crucial for the business enterprise, he contends that keeping a level that is low of loans may be the objective. As well as in this, UangTeman relies heavily in the technology it offers built.
Clients will see down whether their application is authorized or perhaps not immediately. For those who are authorized, UangTemanвЂ™s operations group will continue steadily to monitor to make certain there isn’t any fraud.
вЂњOnce everything is authorized, clients will get the amount of money in their bank reports in three to a day,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 survey that is internal% of its clients are micro business people; 25% utilize the loan for academic function; and around 20% utilize it to spend medical center and medical bills, relating to Aidil.
Back once again to tips
The concept behind UangTeman was to provide under-banked people use of financial loans, specially to little and short-term loans that will provide their fundamental and day-to-day requirements.
вЂњThe target audience is simply those who cannot very own bank cards. They will have fundamental bank reports, however the banking institutions aren’t lending them cash since they carry a risk that is highвЂќ says Aidil.
A credit that is recent on MSMEs (micro, little and medium enterprises) by industry regulator Bank Indonesia revealed that MSME loans account fully for 18.5per cent of banking institutionsвЂ™ total credit distribution.
But associated with total that would go to MSMEs, medium loans make-up 48.1% payday loans in Texas, tiny loans have a 28.5% share, and micro loans make-up 23.5%. By Bank IndonesiaвЂ™s meaning, a micro loan is certainly one without any practical minimum up to no more than Rp50 million (US$3,718).
Sustainable business design
Although UangTeman has secured an undisclosed seed-funding round from investors offering Alpha JWC Ventures, Aidil claims the company model is sustainable and that the startup might survive without relying greatly on such outside investments.
Nevertheless the seed investment could be needed seriously to measure its operations and achieve more towns and suburbs into the nation, also to open one or more contact centre workplace in each city it runs in.
вЂњWe have already been earning profits from Day One, with this very very very first clients, and I also think this really is additionally exactly just what attracted our investors,вЂќ Aidil claims.
He additionally contends that the investors had been keen to spend in UangTeman because he’s perhaps not through the services that are financial.
вЂњIf you need to change and disrupt the economic solutions industry, you have to result from the surface, i really believe.
вЂњThat means, it will be easy to see other ways to deliver similar items; disruption can occur as soon as we cross each otherвЂ™s industry,вЂќ he adds.
Aidil says that UangTeman would probably pursue Series-A money early the following year, claiming it currently has investors prepared.
The program now could be to teach industry, specially individuals from residential district areas, along with to start a contact centre workplace in western Java.
Presently UangTeman runs in Jakarta, Bogor, Depok, Tangerang and Bekasi (Jabodetabek), Yogyakarta, Solo, Magelang and Klaten.