Indonesian online consumer finance platform Akulaku says it has fulfilled all outstanding loan obligations to the European peer-to-peer (P2P) marketplace Mintos.
Mintos, which allows loan originators like Southeast Asia-focused Akulaku to raise funds from investors on its platform to fund loans in their home markets, had suspended the Jakarta-based company in April last year over late payments on about €4.7 million ($5.1 million) worth of loans.
In a blog post on June 14, Mintos said, Akulaku has recently made repayments, of € 9 390 862, resulting in a 100% recovery of all amounts outstanding. “The total amount recovered is larger than the amount stated at the time of suspension due to an accumulation of interest since 16 April 2020,” it noted. At the time of suspension, Mintos noted that the amount of Akulaku’s outstanding investments and pending payments was €20,787,453.
Following the suspension last year, the two companies had reached a series of agreements to restructure Akulaku’s outstanding loan principal and interest repayments due to uncertainty around COVID-19’s economic impact on Southeast Asia.
It had been agreed that Akulaku would repay all existing obligations by the end of 2021, but the company said that it managed to accelerate the repayment schedule thanks to “robust recovery of businesses in Akulaku’s core markets, as well as a strong operating performance in the last several quarters.”
“COVID was a shock to most businesses around the world, including ours, but we assessed, adjusted and executed upon our core vision of simplifying access to banking products and addressing the unmet financial needs of consumers throughout Southeast Asia,” Akulaku CEO William Li said in a statement.
Akulaku raises money from investors to lend to merchants and customers across Southeast Asia. “Currently there are no further plans for new credit facilities with Mintos. We speak with credit providers across the globe on an ongoing basis,” an Akulaku spokesperson said when asked if the company would access a fresh debt facility from the global marketplace.
The company has a wide partner base in Indonesia, where it distributes consumer loans to e-commerce platforms such as Blibli.com, Bukalapak, Shopee and JD.id.
The company also has an affiliate a peer-to-peer lending platform, Asetku, in Indonesia that provides loans to Akulaku’s merchants and customers.
In January, DealStreetAsia reported that Akulaku has been engaged in talks with potential strategic partners to sell a 15% stake in Asetku. The former is said to be eyeing $18 million from the sale, according to sources aware of the development.
Akulaku holds an 85% stake in Asetku, while the rest is owned by investors including Akulaku’s own eCommerce arm PT Akulaku Silvrr Indonesia. The funds raised will be used to support Asetku’s business plans and working capital requirements, besides meeting marketing costs and funding expansion.
Akulaku last publicly announced funding round was back in 2018 when it raised $70 million led by Chinese financial technology company FinUp and joined by other investors including Sequoia India, Australia’s Blue Sky and Qiming Venture Partners.
However, it has since been reported that the company had raised its Series D round of around $100 million which saw participation from Ant Financial, the financial services arm of Chinese tech giant Alibaba.
Bullish on digital banking
In an extension of its core capability in lending, Akulaku in 2019 acquired a minority stake in local lender Bank Yudha Bhakti, which has now been transformed into a digital bank by the name of Bank Neo Commerce.
Akulaku currently holds an almost 25% stake in the bank, after gradually increasing its stake from an initial 8.95%. Going forward, the company tells DealStreetAsia that it is looking to inject more capital into the BNC to make it compliant with the Financial Services Authority’s (OJK) newly-mandated core capital requirement of least Rp3 trillion by 2022.
“We’ll make sure BNC’s P&L and balance sheet remain healthy but in the short term, we’ll be investing more capital and resources to establish a more solid foundation of users. We’ll be looking for outside partners to come in as well for stronger and faster growth if the opportunity fits,” an Akulaku spokesperson said, responding to a DealStreetAsia query.
Akulaku is only one of the many new-age firms betting on transforming traditional lenders into digital banks in Indonesia. In January this year, Sea group acquired Bank Kesejahteraan Ekonomi (BKE), while ride-hailing firm Gojek raised its stake in Bank Jago to 22.16% from 4.14% in December.
Despite the heated competition, Akulaku is bullish about its chances in the digital banking sector.
“Given Akulaku’s experience in transforming financial services in Indonesia, as well as our expertise in technology, risk management, existing user base, we are confident that we can compete well against other banks, digital or otherwise,” the spokesperson said.