Without a doubt about tiny loans to tide you over till payday

FROM being called ‘worse than loan sharks,’ to more basic reviews saying that it really is extremely difficult to obtain that 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 as a free promotional tool that he struggled with the bad publicity at first, but managed to use it.

“We are now actually nine months old, operating fast and doing pretty much. Being a startup, you must never be scared of bad press; you simply should try to learn just how to handle it,” he claims.

UangTeman, or ‘Friend’s Money’ in English, began operations in April 2015, and has now been growing 20% to 25per cent month-on- thirty days since, based on 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 as much as no more than Rp2 million (US$148.60) and at the least Rp1 million (US$74.20) the time that is first but are charged a 1% rate of interest each day for the following 18 to 25 times.

Even though many look at 1% day-to-day interest as way too much, Aidil contends that this is actually the only cost that clients need to deal with – there are no management or processing charges.

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

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

He additionally stresses that UangTeman just isn’t contending because of the banking institutions, however with the mortgage sharks and lenders that are informal industry.

“The loan roof will increase to Rp3.5 million (US$260) therefore the rate of interest is certainly going down once the debtor shows credit that is good and has now lent several times currently.

“The almost all individuals in Indonesia are surviving from paycheque to paycheque; like a online title loans North Carolina friend if they need extra money, UangTeman will be there for them.

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


the primary challenge for just about any financing company is an extensive back ground check for the borrower that is potential. UangTeman depends upon technology because of this type or type of research, in accordance with Aidil.

“We have actually our very own technology and algorithms which will perform some background that is initial using lots 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 could be the objective. Plus in this, UangTeman relies greatly in the technology this has built.

Clients will discover down whether their application is authorized or otherwise not immediately. If you are approved, 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 funds inside their bank records in three to twenty four hours,” Aidil promises.

Although the loan quantity will not seem like much, this indicates to match the requirements of the goal market UangTeman is serving.

From the survey that is internal% of their clients are micro business people; 25% make use of the loan for academic function; and around 20% utilize it to pay for medical center and medical bills, based on Aidil.

Back once again to fundamentals

The concept behind UangTeman would be to provide under-banked individuals use of financial loans, specially to tiny and short-term loans that may provide their fundamental and day-to-day requirements.

“The target audience is actually individuals who usually do not credit that is own. They’ve basic bank records, however the banks aren’t lending them cash simply because they carry a high-risk,” says Aidil.

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

But associated with the total that would go to MSMEs, medium loans make-up 48.1%, tiny 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 enterprize model

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.

Nevertheless the seed investment could be necessary to measure its operations and achieve more metropolitan areas and suburbs when you look at the nation, also to open a minumum of one contact centre workplace in each town it runs in.

“We are earning profits from Day One, with your very very very first clients, and I also think this will be additionally just just exactly what attracted our investors,” Aidil claims.

He also contends that the investors had been keen to spend in UangTeman because he could be perhaps not from the services that are financial.

You must come from the outside, I believe“If you want to change and disrupt the financial services industry.

“That means, it will be possible to see other ways to supply the exact same services and products; disruption sometimes happens whenever we cross each other’s industry,” he adds.

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

The master plan now could be to coach the market, particularly folks from suburban areas, along with to open up a contact centre workplace in western Java.