Sunday, 16 June 2019 | 12:09 WIB

Amartha Mikro Fintek’s Financing Surges 200 Percent This Year

Amartha Mikro Fintek's Financing Surges 200 Percent This Year (pemkabbelu)

JAKARTA, NNCAmartha Mikro Fintek (Amartha), a pioneer of Peer-to-Peer (P2P) micro lending platform in Indonesia, has provided the opportunity for individuals or institutions to participate in developing micro-enterprises that have been proven safe and profitable.

Established in 2010 as a microfinance institution and transformed into a P2P company in 2016, Amartha offers opportunities for investors who want to provide access to capitals, and connect with rural micro-entrepreneurs in rural areas who need venture capital funding so that they are expected to contribute to increased financial inclusion community in Indonesia, especially in rural areas.

The potential of the fintech market in Indonesia is significant. The presence of fintech, especially P2P lending, is believed to be taking part in improving the Indonesian economy which can be realized by helping capital for MSMEs.

"Since it was first established, Amartha has continued to be committed to connecting unbanked micro entrepreneurs, with investors who want to participate in a more profitable and socially valuable funding sector," said Amartha Founder & CEO Andi Taufan Garuda Putra.

Another uniqueness lies in micro entrepreneurs or Amartha Partners, all of whom are women. In the past 1 year, there has been a significant increase in the number of Amartha partners and the total funds that have been channeled.

In 2018, more than 152,000 women micro entrepreneurs in Indonesia have become Amartha's partners, increasing 117 percent from 2017 to more than 70,000 partners.

"Meanwhile, for the total funds distributed in excess of IDR 635 billion, it has risen by more than 200 percent from 2017 amounting to IDR 200 billion," he said.

Women entrepreneurs are the main focus of Amartha's funding, because around 51 percent of small businesses and 34 percent of medium-sized businesses in Indonesia are owned and run by women.

IMFEA (Indonesia MicroFinance Expert Association) Founding Member and Project Leader - Faculty of Economics and Business, University of Indonesia (FEB UI), Dewi Meisari Haryanti, said that fintech P2P lending is one of them that has great potential to bring financial inclusion.
The ease of procedures presented by fintech greatly helped MSMEs, as evidenced by the increase in the borrower account by almost 600 percent (from January-September 2018, OJK). Through fintech, physical collateral does not only have to be a guarantee.

The form of "collateral" can be replaced with group recommendations (joint responsibility system), the existence of coaches/cooperatives as guarantor, and even the "track record" of borrowers stored both in the system can act as collateral.

Head of SME Product, PT Bank Permata Tbk (PermataBank) Business Support & UORM, Haryanto Suryonoto said that the positive collaboration of banks with the fintech P2P lending industry is expected to empower MSMEs through more flexible and easier access to capital, and turn the economy wheel faster so that creating new jobs and alleviating poverty.

"Through fintech companies like Amartha, we can be able to improve operational efficiency so that we can reach remote areas and process loan applications more quickly to productive sectors such as MSMEs," he added.

The current growth in the transaction value of the fintech Indonesia market is projected to grow 16.3 percent per year, and in 2018 it is estimated that the transaction value will reach US $ 22.34 million or around IDR324 billion.