Indonesian P2P lender ALAMI buys local Sharia rural bank, plans to raise more funds

The Sharia-compliant peer-to-peer (P2P) lender ALAMI Technologies has acquired a Sharia rural bank, PT BPRS Cempaka Al-Amin, in Indonesia, three people familiar with the matter told DealStreetAsia.

The sources added that the total transaction value is less than $10 million.

“The acquisition is aimed at expanding their services,” said one of the sources requesting anonymity because the matter is sensitive.

The acquisition will help BPRS Cempaka Al-Amin add fresh capital. According to new norms specified by Indonesia’s Financial Services Authority (OJK), rural banks in Jakarta must have a minimum paid-up capital of Rp100 billion ($6.95 million).

ALAMI is also in talks to raise a Series A+ round, to meet OJK’s capital compliance requirements for fintechs. Potential investors who may participate in the fundraising include Sequoia Capital and existing investor Quona Capital, a global fintech fund.

Quona Capital had participated in ALAMI’s over $20 million Series A1 equity-cum-debt funding in January this year. The equity component of the round was led by AC Ventures and Golden Gate Ventures. The debt funding was raised from an undisclosed “international impact fund”.

The company had also closed a $1.5 million seed round, led by Golden Gate Ventures, in January last year, and raised $3.1 million from AC Ventures, and others in December.

ALAMI CEO Dima Djani declined to disclose information regarding the latest acquisition and fundraising plans. He said the company is exploring the possibility of developing its business. “We’re strategically exploring to develop our business beyond P2P to other businesses. Currently, we can’t disclose information as it is an ongoing process,” he said.

Sequoia Capital, Quona Capital, and BPRS Cempaka Al-Amin didn’t respond to DealStreetAsia’s email.

Islamic financing finds favour

“Islamic financing is gaining strength due to a behavioral shift among young Muslims, who want to adopt an Islamic lifestyle. For expansion, we are still going to be very much focused on the Indonesian market, given the country has the largest Muslim population in the world,” said Djani.

ALAMI, established in 2017, initially operated as an aggregator for Islamic finance, working with sharia banks to facilitate SME invoice financing. However, it expanded into the sharia-compliant P2P lending space after obtaining a peer-to-peer (P2P) licence from OJK.

Djani said the firm’s monthly disbursements grew from an average Rp9 billion ($625,370) to Rp55 billion ($3.82 million) during the pandemic. The firm is targeting disbursements of Rp80 billion ($5.58 million) in March.

Its total users stand at around 30,000, which is expected to double in the next three months, said Djani. The platform operates on the Android platform and plans to launch an iOS version soon.

He revealed that the company plans to widen its ecosystem, with digital players and sharia lenders, including sharia rural banks in Jakarta.

The number of Sharia-based fintechs registered in Indonesia stood at 11 last year — seven in peer-to-peer lending, while the rest were in crowdfunding, payments, and investment management, per data collated by DealStreetAsia. This suggests more room for growth, given Malaysia is home to over 26 registered Sharia-based fintechs.

ALAMI forges partnerships with startups in e-commerce and IOT, hospitals, and logistics companies. Also, it also has collaborations with Islamic banking financial institutions such as Islamic Commercial Banks (BUS), Sharia Business Units (UUS), and Sharia Rural Banks (BPRS).

Singapore Reporter/s

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.