Indonesian peer-to-peer (P2P) fintech lender Investree has managed to keep its head above water despite the turmoil caused by COVID-19.
While the impact of the pandemic on borrowers’ incomes led to an increase in non-performing loans (NPLs) for the fintech industry as a whole this year, Investree’s share of bad loans has been stable. In September 2020, its NPLs stood at 1.19 per cent of the overall loan book, only marginally up from 1 per cent in September 2019.
Meanwhile, for the fintech industry the NPL rate has shot up to 8.27 per cent in September from 2.89 per cent a year ago, show data from Indonesia’s Financial Services Authority (OJK).
Similarly, the industry’s TKB-90 rate — a measure of the number of successful loan repayments over the past 90 days on a fintech platform, or essentially the opposite of an NPL rate — slipped to 91.73 per cent in September 2020, down 5.54 percentage points year-on-year, show OJK data.
Five-year-old Investree, however, managed to maintain its TKB-90 rate at a high 98-99 per cent throughout the year.
Source: Financial Services Authority (OJK)
“During the pandemic, we did stress-testing on our portfolios and reclassified our target market. We avoided certain industries and focused on certain segments, such as invoice procurement contracts for the government. We cooperate with the government goods and services procurement policy agency (LKPP), as we believe these segments can make a payment as the fund comes from the government budget,” Investree CEO Adrian Gunadi told DealStreetAsia.
Fundraising and expansion
Investree has also secured an undisclosed amount of funding in a debt facility from investors Accial Capital and Tokyo-headquartered GMO Payments, Gunadi told DealStreetAsia. The funding is part of the second tranche of its Series C round (C2 round), which the company expects to close in the first quarter of 2021.
Gunadi, who founded the firm with fellow bankers Amir Amiruddin, and Kok Chuan Lim in 2015, said the firm expected to obtain $24-25 million in the Series C2 round, which is similar to the $23.5 million that it raised in April from BRI Ventures and MUFG Innovation Partners.
The company is also backed by Kejora Ventures, SBI Group, Mandiri Capital Indonesia, 9F group, and Persada Capital.
Investree is also looking to expand its footprint. “There are strategic plans that we are looking at, including regional expansion and the potential strategic opportunity,” said Gunadi.
The firm expects to get full operational licences to operate in Thailand and The Philippines by the end of this year. “If we obtain the licence, we will be the first firm to secure a crowd-lending license in Philippines,” said Gunadi.
In the Philippines, Investree has established a partnership with Filinvest Development Corporation (FDC), one of the country’s largest conglomerates. FDC’s line of businesses cover banking and financial services, property, power, and infrastructure. Investree also partners with Thailand’s 2C2P and the e-procurement startup, Pantavanij.
The business plan in the two countries will be the same as Indonesia’s business operation, which focuses on supply chain financing.
Growth on track
For 2021, Investree says it is on target to record double-digit growth in loan disbursement by collaborating with more partners to expand the peer to peer ecosystem.
Recently, Investree collaborated with fisheries platform eFishery, logistics company Kargo tech, online marketplace Bukalapak, B2B marketplace Ralali, and payment gateway Midtrans to distribute loans to its merchants or SMEs. The loan disbursement to the merchant ‘ partners has reached 60 per cent of total loan disbursement. The rest comes organically from its business.
“We will focus on building our ecosystem by collaborating with partners. The collaboration is how we find the borrowers and distribute our financing in the next year,” Gunadi said.
He added that the firm will explore potential partnerships with several SaaS startups, with a focus on cloud computing, tax software, or ERP (Enterprise resource planning) business. The partnerships could be in the form of exclusive partnerships, joint ventures, or investments in those startups.