Let me make it clear about tiny loans to

FROM being called ‘worse than loan sharks,’ to more basic reviews stating that it really is almost impossible getting a loan from the web site, UangTeman is surviving, and even, apparently thriving.

Talking recently to Digital News Asia (DNA) in Jakarta, its cofounder and ceo Aidil Zulkifli (pic above) admits he struggled with all the bad promotion in the beginning, but was able to make use of it as a totally free marketing device.

“We are actually nine months old, operating fast and doing pretty well. As a startup, you must never be scared of bad press; you merely should find out simple tips to handle it,” he says.

UangTeman, or ‘Friend’s cash’ in English, began operations in 2015, and has been growing 20% to 25% month-on- month since, according to Aidil april.

The services that are financial (fintech) startup dispenses payday advances to individuals in need of assistance: tiny, short-term loans to greatly help borrowers endure due to 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 time that is first but they are charged a 1% rate of interest each day for the following 18 to 25 times.

Even though many start to see the 1% daily rate of interest as way too much, Aidil contends that here is the only cost that clients need certainly to deal with – there are no administration 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 try not to gather cash from individuals. The funds we provide to your clients arises from our personal ‘friendly’ pockets,” declares the Singaporean-born lawyer that is former.

He additionally stresses that UangTeman is certainly not contending aided by the banking institutions, however with the mortgage sharks and lenders that are informal the marketplace.

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

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

“It is about making a large effect – it is about building a small business where from the one hand, you can make money, yet payday loans Monett MO online on the other side, you possibly can make a confident effect on society,” he adds.


the key challenge for almost any financing business is a thorough history check for the prospective borrower. UangTeman depends upon technology because of this type or form of due diligence, based on Aidil.

“We have actually our personal technology and algorithms that may perform some background that is initial utilizing 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 minimal amount of non-performing loans could be the objective. Plus in this, UangTeman relies greatly from the technology it’s built.

Clients will discover away whether their application is authorized or otherwise not instantly. If you are authorized, UangTeman’s operations group shall continue steadily to monitor to make certain there is absolutely no fraud.

“Once everything is authorized, clients will get the cash inside their bank records in three to a day,” Aidil promises.

Although the loan quantity doesn’t appear to be much, it appears to match the requirements of the prospective market UangTeman is serving.

From the survey that is internal% of the clients are micro business people; 25% utilize the loan for educational purpose; and around 20% make use of it to cover medical center and medical bills, in accordance with Aidil.

Back again to fundamentals

The concept behind UangTeman would be to offer under-banked individuals use of lending options, particularly to tiny and short-term loans that may serve their fundamental and needs that are daily.

“The target audience is actually individuals who usually do not credit that is own. They will have basic bank records, nevertheless the banking institutions are not lending them money simply because they carry a risk that is high” 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 18.5percent of banking institutions’ total credit circulation.

But for the total that would go to MSMEs, medium loans constitute 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 offering Alpha JWC Ventures, Aidil claims the company model is sustainable and therefore the startup may survive without relying greatly on such outside assets.

Nevertheless the seed investment could be necessary to measure its operations and achieve more metropolitan areas and suburbs into the nation, and 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 that is additionally what attracted our investors,” Aidil claims.

He additionally argues that the investors had been keen to spend in UangTeman because he could be perhaps perhaps not through the monetary solutions industry.

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

“That means, it is possible to see other ways to supply exactly the same items; interruption can occur whenever we cross each industry that is other’s” he adds.

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

The program now is to coach the marketplace, particularly individuals from residential district areas, along with to start a contact centre workplace in western Java.