Social finance platform aims to achieve a 300% growth to allow direct Sharia-compliant investments into SMEs.
Jakarta: Ethical investment and social finance platform operator Ethis Fintech Indonesia has secured $3 million pre-series A funding from an existing retail investor and Saudi Arabia family office, Ronald Yusuf Wijaya, CEO and co-founder, told Salaam Gateway.
The funds will be channelled to expand its financing in Indonesia. This year the company aims to reach 360 billion rupiah ($24.97 million) financing or a 300% growth over the 120 billion rupiah ($8.3 million) financing achieved in 2021. That growth came on a 50% growth on the previous year’s 70 billion rupiah ($4.8 million).
“Our holding company Ethis Group secured a license from Oman’s capital market authority to allow direct Sharia-compliant investments into SME companies and special purpose vehicle (SPV) projects … This will expand our network globally from Malaysia to Indonesia and now Oman,” Ronald said.
With the operation in Oman, corporate or individual investors with big ticket size can channel their funds through Ethis Group and thus Ethis Indonesia will benefit from the growth traction.
Ethos Indonesia also secured a license from financial services authority OJK on l October 2021 to fully operate commercially. Ronald said, following the license permission, the fund could attract a super lender (big ticket size investor) and collaborate with several Sharia rural banks (BPRS) to expand growth.
Also chairman of Indonesia Sharia P2P Association (AFSI), Ronald noted the Sharia P2P financing volume rose from 484 billion rupiah ($33.5 million) in 2020 to 1,132 billion rupiah ($78.5 million) last year, where most financing comes from Dana Syariah, Alami, Ethis and Ammana.
The industry offers various new financing products including working capital financing, advance salary financing for corporate, financing to order meat inventory for seller, merchandise for reseller and other financing with the buy-now pay-later (BNPL or murabaha model).
Sharia lender Alami secured $30 million to channel towards small, medium and microenterprises (SMMEs)
Another Sharia P2P lender Alami also secured $30 million funding from Lendable using the Wakalah bil Istithmar contract, Dima Djani, the founder and CEO, told Salaam Gateway. This fund would be channelled into SMME projects with Dima indicating there was currently a $108 billion funding gap in this sector in Indonesia. He said SMMEs had only received $57 billion in financing of the $165 billion total required.
“We hope to continue supporting SMMEs so the halal industry can be accelerated in line with the government agenda,” Dima said.
Alami has disbursed 2.19 trillion rupiah ($151.9 million) financing cumulative effective 31 March 2022 where 18.2% goes to telecommunications followed by the culinary segment (14.6%) and energy (13.2%).
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