Indonesian P2P Fintech Startup Modalku Becomes Fully Registered With the OJK
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Modalku, an Indonesia-based peer-to-peer lending fintech startup, announced this week it is now fully registered with the Otoritas Jasa Keuangan (OJK). Founded in 2016, Modalku describes itself as an online marketplace for small businesses to acquire loans and for lenders to fund small business loans to earn returns. The company revealed:
“Our technology-based approach enables borrowers to receive loans for the first time or at lower than market rates, while lenders will earn returns well above that of bank deposits, traditional fixed income products, and life insurance investment-linked products. This marketplace lending model is proven in countries such as USA, UK, China & Singapore.”
Modalku also noted that SMEs are a key source of employment and economic growth in Indonesia, but seem to be structurally disabled by financial institutions to get the financing they need. According to Digital News Asia, Modalku has already disbursed loans totaling more than Rp175 billion (US$13.15 million) to 320 MSME loans. While discussing the OJK registration milestone, Modalku co-founder and CEO Reynold Wijaya revealed:
“The fact that OJK focused on P2P lending regulations in Indonesia shows that the government sees the enormous potential of fintech in supporting financial inclusion. MSMEs have always been the backbone of the Indonesian economy, contributing 60.3% of national GDP and 97% of national employment. With solid regulation, underbanked MSMEs will have better access to financing and find it easier to grow their businesses.”
OJK senior executive researcher Hendrikus Passagi added:
“OJK supports and will continue to encourage borrowing and lending activities via P2P lending fintechs as an alternative to national financing products that require no collateral. We view the digital financial ecosystem built by P2P lending fintech platforms as ideal partners to support financial inclusion in Indonesia. With official registration at OJK, Indonesian P2P lending platforms are expected to increase borrowing and lending activities at a much larger scale for local MSMEs while still putting customer protection and stability of the Indonesian financial system first.”
Modalku currently operates in Indonesia, Singapore, and Malaysia.
Questions & Answers
Q.What is Modalku's primary business model and how does it benefit both borrowers and lenders?
What is Modalku's primary business model and how does it benefit both borrowers and lenders?
Modalku operates an online marketplace connecting small businesses seeking loans with lenders. This model helps borrowers access loans at lower rates and lenders achieve returns exceeding traditional financial products.
Q.Why does the OJK and the Indonesian government view P2P lending as important for the economy?
Why does the OJK and the Indonesian government view P2P lending as important for the economy?
The OJK supports P2P lending as it provides an alternative financing source for underbanked MSMEs, who are crucial to Indonesia's GDP and employment. It supports financial inclusion and economic growth without requiring collateral.
Q.What has Modalku achieved so far in terms of loan disbursement and which regions does it operate in?
What has Modalku achieved so far in terms of loan disbursement and which regions does it operate in?
Modalku has disbursed over Rp175 billion (US$13.15 million) across 320 MSME loans. The company currently operates in Indonesia, Singapore, and Malaysia.
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