Indonesian P2P lender Amartha raises $7.5m from Norway wealth fund

Indonesian peer-to-peer (P2P) lender Amartha that focuses on empowering women micro-entrepreneurs in rural areas has raised $7.5 million in funding from Norwegian sovereign wealth fund Norfund, its founder and CEO Andi Taufan Garuda Putra told DealStreetAsia.

The corpus raised will be distributed as a working capital loan to women micro-entrepreneurs in rural areas as the fintech firm gears up to promote environmentally sustainable business practices, thereby minimizing the use of plastic, and enhance the adoption of renewable energy such as affordable solar panels.

With the current round of investment, Amartha is looking to extend loans to entrepreneurs who are building their businesses keeping in mind climate change and environmental issues.

“We are adopting different initiatives and looking at potentially lower interest rates, compared to our current interest rates, for borrowers who apply the loans for green businesses. We plan to collaborate with NGOs (Non-Governmental Organisations) and private sector players who are concerned about the environment, renewable energy sectors,” Putra said.

Talks between Amartha and Norfund for funding were initiated way before the coronavirus outbreak shook the world, said Putra. However, negotiations were put on hold for a while, since Amartha was waiting for its business to recover.

Like other fintech firms, the COVID-19 crisis had an adverse impact on Amartha’s business for a few months starting March 2020. The company’s TKB-90 rate – which highlights the number of successful loan repayments – dropped to 94% between March and April last year compared to the pre-pandemic level when it stood at 99%.

However, its business started recovering from June last year with micro and small businesses showing signs of a pickup in the archipelago. Currently, the lender claims to have a TKB-90 rate of 99.86%.

Since its inception in 2010, Amartha has reportedly disbursed loans worth over $250 million to 678,502 women borrowers across 18,900 villages in Java, Sumatra, and Sulawesi.

This year, its loan disbursement grew 12.05% between January and May to stand at $48.52 million from $43.29 million in the same period last year.

Going forward, Amartha plans to launch additional financial services and products such as savings, and microinsurance in the market.

While certain services have been initiated on a limited scale in areas such as East Java and Sulawesi, Putra said he plans to extend those in more locations this year. The company has been collaborating with other startups, insurtech firms, and lenders to provide such services.

When asked if Amartha is in talks to invest in a smaller bank, Putra said the company is “open to exploring a strategic initiative.”

With the current funding, Amartha this year has secured a total of $85.5 million in debt and equity from several global funds and VCs.

The company last made headlines in May when it snagged $28 million from Women’s World Banking and MDI Ventures wherein existing investors such as Mandiri Capital Indonesia and UOB Venture Management also topped up.

Additionally, in February, it secured $50 million in debt financing from the US-based lending platform Lendable.

Putra said the company is still in talks with a bouquet of international firms to raise funding as it lines up aggressive expansion plans.

Indonesia’s P2P lending firms are increasingly evincing investor interest. ALAMI, a Sharia-compliant lender headquartered in Jakarta, is said to be close to raising over $12 million as part of its Series A+ funding round, sources told DealStreetAsia earlier.

Growth in the sector is expected to gain traction with Indonesia’s Financial Services Authority (OJK) granting licences to ten fintech lending platforms in the country, including Tokopedia’s peer-to-peer (P2P) lending arm Dhanapala.

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.

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.