Indonesian Islamic challenger bank Hijra is working on multiple new offerings including a cash Waqf-linked deposit account and a P2P Qard-based offering, Group CEO Dima Djani tells IFN Fintech.
Social finance
Hijra, which began as a financial aggregator (as ALAMI) before obtaining a P2P license and finally securing a digital bank license, is focusing on social finance instruments.
Notably, it is working on at least two related products: a cash Waqf-linked time deposit account, where a portion of the yield generated will be channeled toward Waqf projects and partner foundations; and a P2P Qard offering, enabling individuals to provide and secure zero-interest loans from their community in a digital and automated manner.
“Indonesia, and everywhere else in the world, have been attacked by digital loan sharks [predatory lenders]. Before technology was available, people would borrow money from friends and family; but with that, there is usually a reluctance to ask for the money back or people would forget. We are leveraging on the banking infrastructure and our technology to automate all of that,” Dima shared with IFN Fintech on the sidelines of IFN Asia Forum 2023 last week.
Bank financing
Apart from that, the Islamic digital bank is working on several financing products.
Dima confirmed that Hijra will be launching a Halal mortgage product, which would not have been possible without its banking license. Auto financing is also in the pipeline.
The digital bank is also working on enabling QR code-based ATM cash withdrawals, leveraging on initiatives by Bank Indonesia to introduce the feature nationwide.
“For us, technology can be used to reach the unbanked as well as underbanked. The underbanked, those who are already using banking services but still have not had their problems solved or needs met, are low hanging fruits for us,” Dima remarked.
For the unbanked, Hijra has mobilized measures to reach out to rural communities of Indonesia.
“We are working with different ecosystems to provide embedded financing to farmers and fishermen in remote islands of Indonesia and we’ve been able to provide financing for more than 3,000 of them over the last two years. We’re excited and we are trying to cross sell banking products to them.”
Fresh funding
Hijra last week announced the closure of an investment round led by Indonesian venture capital firm Intudo Ventures, alongside existing investors including East Ventures (Growth Fund), AC Ventures, Quona Capital and Golden Gate Ventures. The value of the deal was not disclosed.
The “growth investment round” follows a pre-Series B round last year and a Series A US$37.5 million Series A round.
The virtual bank also welcomed new faces: Ade Fauzan, a former board member and head of business development at BTPN Syariah, as COO, and Dian Triansyah Djani, the Indonesian ambassador to the UN, as an advisor.