FROM being called ‘worse than loan sharks,’ to more basic reviews stating that its nearly impossible to have a loan through the site, UangTeman is surviving, and even, apparently thriving.

Talking recently to Digital Information Asia (DNA) in Jakarta, its cofounder and ceo Aidil Zulkifli (pic above) admits he struggled with all the bad promotion to start with, but were able to utilize it as a free of charge marketing device.

“We are actually nine months old, operating fast and doing pretty much. Being a startup, you shouldn’t be scared of bad press; you merely should try to learn simple tips to manage it,” he claims.

UangTeman, or ‘Friend’s cash’ in English, started operations in April 2015, and contains been growing 20% to 25per cent month-on- month since, in accordance with Aidil.

The monetary solutions technology (fintech) startup dispenses payday advances to individuals in need of assistance: tiny, short-term loans to greatly help borrowers endure with their day-to-day requirements until their next paycheque.

Borrowers usually takes around no more than Rp2 million (US$148.60) and no less than Rp1 million (US$74.20) the very first time, but they are charged a 1% interest a day for the following 18 to 25 times.

Even though many begin to see the 1% day-to-day rate of interest as an excessive amount of, Aidil contends that this is actually the only cost that clients need certainly to deal with – there are no management or processing costs.

He keeps the attention price is “relatively okay” compared aided by the danger the startup faces every day.

“We aren’t a bank; we don’t gather cash from individuals. The income we provide to your clients arises from our own ‘friendly’ pockets,” declares the Singaporean-born lawyer that is former.

He also stresses that UangTeman just isn’t contending aided by the banking institutions, however with the mortgage sharks and casual loan providers in the marketplace.

“The loan roof will increase to Rp3.5 million (US$260) in addition to rate of interest goes down as soon as the debtor shows good credit behavior and has now lent several times currently.

“The most of people in Indonesia are surviving from paycheque to paycheque; like a friend if they need extra money, UangTeman will be there for them.

“It is focused on making a large effect – it is about building a small business where regarding the one hand, you possibly can make cash, yet in the other, you may make an optimistic effect on society,” he adds.

Research

the primary challenge for almost any financing company is a thorough background check associated with borrower that is potential. UangTeman is determined by technology because of this form of research, in accordance with Aidil.

“We have our personal technology and algorithms which will perform some background that is initial making use of plenty of information points,” he adds.

While stressing that security and privacy will also be crucial for the business enterprise, he contends that keeping a level that is low of loans may be the objective. Plus in this, UangTeman relies heavily in the technology this has built.

Clients will discover out whether their application is authorized or otherwise not immediately. If you are authorized, UangTeman’s operations group will continue steadily to monitor to make sure there isn’t any fraudulence.

“Once everything is authorized, clients will get the income in their bank records in three to twenty four hours,” Aidil promises.

Although the loan amount will not appear to be much, it appears to match the needs of the prospective market UangTeman is serving.

From the interior study, 30% of the clients are micro business people; 25% utilize the loan for academic purpose; and around 20% make use of it to pay for medical center and medical bills, based on Aidil.

Back to fundamentals

The concept behind UangTeman would be to provide under-banked people usage of lending options, specially to little and short-term loans that may provide their fundamental and needs that are daily.

“The target audience is actually individuals who usually do not own bank cards. They usually have basic bank records, however the banking institutions aren’t lending them cash since they carry a high risk,” says Aidil.

Terre Haute payday loan and cash advance

A credit that is recent on MSMEs (micro, little and medium enterprises) by industry regulator Bank Indonesia indicated that MSME loans take into account 18.5per cent of banking institutions’ total credit circulation.

But associated with total that would go to MSMEs, medium loans make-up 48.1%, little loans have 28.5% share, and micro loans make-up 23.5%. A micro loan is one with no practical minimum up to a maximum of Rp50 million (US$3,718) by Bank Indonesia’s definition.

Sustainable business design

Although UangTeman has guaranteed an undisclosed seed-funding round from investors such as Alpha JWC Ventures, Aidil claims the company model is sustainable and therefore the startup may survive without relying greatly on such outside opportunities.

However the seed investment could be necessary to measure its operations and achieve more towns and suburbs within the nation, also to start one or more contact centre workplace in each town it runs in.

“We have already been money that is making Day One, with this very first clients, and I also think this will be additionally exactly just what attracted our investors,” Aidil claims.

He additionally contends that the investors had been keen to spend in UangTeman because he could be maybe not through the services that are financial.

“If you intend to alter and disrupt the monetary solutions industry, you need to originate from the surface, I think.

“That means, it will be possible to see various ways to provide exactly the same services and products; interruption sometimes happens whenever we cross each industry that is other’s” he adds.

Aidil claims that UangTeman would probably pursue Series-A funding early the following year, claiming it currently has investors prepared.

The master plan now’s to coach industry, specially folks from residential district areas, along with to open up a contact centre workplace in West Java.