Indonesian peer-to-peer platform Modalku ("My Capital" in Bahasa) has today announced the closure of a $1.2 million funding round, led by venture capital firm Alpha JWC Ventures and by an undisclosed number of overseas venture capital investors.
Launched in January 2016, Modalku aims to provide support to the growth of local entrepreneurs and small businesses, as well as establishing an attractive investment alternative for lenders. The company is run by Kelvin Teo and Reynold Wijaya, who are also the founders of Funding Societies, a peer-to-peer lending platform in Singapore.
The platform facilitates unsecured loans with interest rates between 15 per cent and 20 per cent. Loans range from Rp50 million to Rp500 million ($3,618-$36,180) with terms of 3, 6 or 12 months. To be eligible for a loan, businesses must have a turnover of at least Rp20 million per month, with an operational history of at least 2 years. Investors might expect a return in the range of 12-18% per annum and can start investing from Rp1 million, with a minimum deposit of Rp10 million.
The company has also secured a partnership with PT Bank Sinarmas – an Indonesian Bank, but the terms of the agreement have not been disclosed yet. Reynold Wijaya revealed to Deal Street Asia that the recent capital injection will be used to expand the firm’s services and that other partnerships with other banks are already in the pipeline. He commented:
“We keep opening ourselves to every opportunity out there. What’s important is that we want to strengthen this collaboration with traditional banks to reach the otherwise unbankable small and medium enterprises (SMEs),"