According to Reynold Wijaya, chief executive and co-founder of Modalku, he had developed the platform, as a gathering place for borrowers and financiers.
“Modalku is a direct platform or borrowing market place (peer-to-peer lending/P2P) in Indonesia. This service is an alternative business of investment products based on digital, which will address the needs of SMEs through fast working capital loans with competitive interest rates,” Wijaya said.
Furthermore, he said that for capital service providers, this could be an ideal solution because they get a safe way alternative investment method with low risk, with a return of upto 18 per cent per year.
The services provides non-collateral loans with interest rates between 15 per cent and 20 per cent.
He added that the product is affordable for the middle class financiers. To become an investor, they are required to have deposit of at least Rp10 million ($719,424). Later, Raymond said, they are free to give investment to SMEs anywhere they desire.
He further explains that a homegrown marketplace for peer-to-peer lending, will give Indonesia’s small-and medium enterprises (SMEs) more access to funding.
Modalku’s service intends to fill the funding gap for businesses that may be eligible for a loan, however they are rejected by banks that typically demand collateral or a proven track record.
Modalku offers loans from Rp50 million to Rp 500 million with a tenor of three, six and 12 months. It claims to have the capability to disburse loans within 10 days. Meanwhile, individual lenders are expected to place at least Rp 1 million in funds.
Raymond said similar platform has been successfully developed in Singapore, called Funding Societies. He wants to replicate that in Indonesia.
Funding Societies is a P2P lending marketplace for SMEs to get loans to grow and investors to get good returns in Singapore.
“Since our launch in June, we have crowd-funded S$3 million in loans to 35 SMEs with 100 per cent repayment. We aspire to be the most trusted P2P lending marketplace in Southeast Asia,” Raymon said.
He believed, Singapore and Southeast Asia are ripe for innovation because there is a strong demand for alternative financing and investment, but limited supply and opportunity.