One of Indonesia’s latest licensed fintech companies hopes to capture the Muslim-majority market with a Shariah compliant crowdfunding platform.
Peer-to-peer (P2P) lender Investree Radhika Jaya is looking to introduce a Shariah compliant version of its business model to the retail market over the next two months.
“We are on track to launch the Shariah variant of our P2P model – we target to do a soft-launch at the end of July 2017,” co-founder and CEO Adrian A Gunadi tells IFN Fintech. The firm’s decision is not surprising: the Indonesian crowdfunding scene is still embryonic having first formed in 2015 – all are conventional including Investree, which leaves a huge demand gap to be met.
For an Islamic banking veteran such as Adrian, who previously was leading the Islamic banking business of some of the market’s biggest names including Bank Muamalat Indonesia, Permata Bank and Standard Chartered (product structuring), moving into the Islamic fintech space was only a matter of time. Other tech-based lenders licensed by the OJK include: Amartha Mikor, Mitrausaha Indonesia Group, Pendanaan Teknologi Nusa, SimpleFi, Lunaria Annua Teknologi (KoinWorks) and Danakita Data Prima. Another 19 lending fintech companies have expressed interest in securing an OJK license, with two of them (Ethis Indo Asia and Kapital Boost Indonesia) Shariah compliant.
It has always been the intention of Adrian to run an Islamic crowdfunding avenue when Investree was launched in 2016; now authorized and regulated by the Financial Supervisory Authority (or Otoritas Jasa Keuangan (OJK)) as one of the five fintech companies extended a license this month, Investree will expand its offerings and value proposition.
The crowdfunder, which has a loan portfolio worth IDR156 billion (US$11.58 million) spread across 617 loans as at the 12th June, is targeting revenues to hit the IDR100 billion (US$7.42 million) benchmark for the first half of 2017. None of its borrowers have defaulted, and the platform is distributing an average rate of return of 17.4% to investors.
IFN Fintech understands that local P2P lender Modalku is also interested in exploring the idea of a Shariah compliant crowdfunding platform sometime in the future.