KoinWorks supports SMEs with online lending solution

  • Investors begin with a minimum deposit of US$7.50
  • Offers a flat base rate of between 0.75% and 1.67% to SMEs


KoinWorks supports SMEs with online lending solution


AN INDONESIAN peer to peer (P2P) lending startup, KoinWorks is supporting small and medium enterprises (SME) and education by launching an art exhibition, ARTificial Intelligence which will run from April 13 to April 30 at Pacific Place, Jakarta.

“I believe that to reach success, we need a unique idea and must apply it in everything we do, not just ‘copy and paste’ from existing ideas. So, ARTificial Intelligence is a form of appreciation and support to SMEs and economic development in Indonesia. We hope that we can inspire people to combine creativity in entrepreneurship,” says KoinWork co-founder and chief executive officer Benedicto Haryono in a press conference.

Established in mid-2015, KoinWorks is an online marketplace that connects lenders and to help merchants expand their business with suitable financial services.

“Me and my co-founder Willy Arifin wanted to create an access for Indonesian SMB players to be able to receive funding through financial technology (fintech). A lot of SMBs are still struggling to get funding to develop their business,” adds Benedicto.

Benedicto also says that KoinWorks mainly focuses on SMEs that conduct their sales and marketing activities online. He also believes that by connecting SMEs to lenders, it will bring benefits to both sides.

Benefits for lenders are through net gained interest from their investment which can be up to 19.8% annually depending on the risk level. The service also fulfils social needs by helping businesses to grow.

“In return, investors will receive 19.8% from their investment per year. Investors will also receive updates on the SME’s growth since we always share news through our social media,” he adds.

Users may invest in KoinWorks with a minimum deposit of US$7.50 (100,000 rupiah). The funding will be deposited in real-time at a virtual bank account. Users only need to scan and upload information from their identity card, fill in the form, and deposit the money.

As for SMEs or ‘borrowers’, KoinWorks enables them to access lenders’ data through their platform and they do not have to meet face-to-face. KoinWorks also offer SMEs a one-year plan of borrowing without collateral.

“Even though our concept is the same as other fintechs, which is P2P lending, we focus on flexibility in our approach. We are purely online so SMEs from other cities such as Surabaya, Medan, and Bandung can apply online.

“To qualify, they just have to prove that their businesses are valid and they need greater margins to develop their businesses. We are picking them based on their character and future prospects,” he told DNA.

All SMEs in KoinWorks go through an evaluation and validation system which includes an analysis of financial reports and loan applications through an Artificial Intelligence (AI) machine learning system. Algorithms will evaluate an SME’s capacity to pay.

Currently there are hundreds of SMEs in KoinWorks with the maximum amount of funding, which is 500 million rupiah. Most SMEs in KoinWorks have businesses in crafts and accessories for electronics and fashion.

“We definitely want to develop our creativity by approaching more channels,” he says.

Categories of loans in KoinWorks are business loans (KoinBisnis), education loans (KoinPintar), and health loans (KoinSehat).

Revenue, regulations, and future plans

KoinWorks receives their revenue from fees (number undisclosed) which they gain from every successful transaction.

“If there is no successful transaction, then we will not get any fee and we do not gain any interest fee,” he adds.

Benedicto thinks that KoinWorks is very competitive with a flat rate base of 0.75% to 1.67%.

The web-based platform business is following Indonesia’s Financial Services Authority (OJK) regulations, POJK No. 77/POJK.01/2016 on fintech companies that run P2P lending businesses.

As reported by The Jakarta Post, the regulations requires fintech companies to have one billion rupiah (US$75,352) capital when it registers the business with OJK and 2.5 billion rupiah (US$188,182) in capital will be required to apply for a business license.

“Regarding OJK, we are still in the process of registering and I hope that it will be done soon. We are very supportive of OJK’s regulations because we want ‘healthy’ business and development. The regulations also assure the safety of online lending to our users,” he comments.

The total investment in KoinWork has reached 20 billion rupiah (US$1.5 million) and they are planning to expand their market share in 2017.

“After a year, we have proven our concept to the community. They have started to accept that lending online is safe and they have the responsibility to pay the amount they borrowed,” he concludes.

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