Peer-to-peer (P2P) lender Investree, which offers both Islamic and conventional financing, will begin providing microfinancing to women microentrepreneurs, expanding its suite of products which include invoice financing and working capital term loans, among others.
The licensed P2P platform has partnered with savings and loans cooperative Gramindo Berkah Madani to roll out this microfinancing scheme, inspired by Grameen Bank. To be known as Gayatri Microfinance, the financing program will include Shariah compliant and conventional schemes.
Women founders of supermicro businesses with an average turnover of IDR5–10 million (US$354.31–708.62) per month will be eligible for the program. Eligible borrowers are able to borrow up to IDR20 million (US$1,417.24) for up to 12 months.
It is interesting to note that the guarantee or risk-sharing mechanism of this program is not unlike Takaful.
It is understood that the borrowers will be grouped within the Gramindo-facilitated ecosystem and will assume joint responsibility in which the risk of each individual financing is shared among these women borrowers. If any borrower within the groups formed is unable to meet the debt obligation, the group will cover the payment by opening a “joint responsibility envelop” until the installment payments are paid back to the group.
According to Rio F Achmad, the chairman of Gramindo, this concept is unique in that it is inspired by the culture and characteristics of the Indonesian people. The cooperative will conduct regional mapping to identify local communities. Once identified, women microentrepreneurs will form groups among themselves and submit a financing proposal with the support of Investree as well as agree to the joint responsibility scheme. Investree will carry out due diligence and mitigate the risks associated with the financing using a modern credit scoring system as well as continuous monitoring which includes routine group meetings of the borrowers.
Investree has approved 37 applications from women members of Gramindo.
Part of its Grow Fa5ter campaign, Investree hopes the partnership with Gramindo will assist its ambition to support MSMEs as well as diversify its business to serve the underbanked/unbanked population as it continues to promote financial inclusion.
As of September 2020, Investree has managed to record a total loan facility of IDR7 trillion (US$496.04 million) and disbursed IDR5 trillion (US$354.31 million) in financing with an average return rate of 16.9% per year. Gramindo on the other hand has disbursed IDR36 billion (US$2.55 million) until October 2020, with a perfect repayment rate and an average non-performing loan of 0%.