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PITCH
Connecting cashflow-challenged SMEs with individual lenders seeking alternative investments, P2P lending marketplace Investree processes loans in just three days, with no default to date.
WHY?

SMEs’ cash-flow needs

Short-term loans cover SMEs’ cash flow between payments, and when customers don't pay on time.

Lacking access to loans

Over 60% of Indonesians don’t have bank accounts; while many SMEs don’t have collateral.

Limited investment options

Indonesia’s fast-growing middle class seek investment alternatives to the stock market.

MARKET

US$70 billion

Extent of credit gap in Indonesia estimated by Investree

Huge unmet demand from SMEs lacking collateral to borrow from official channels and from unbanked consumers.

PRODUCT
Online P2P lending marketplace offering short-term loans to SMEs and customized loans for SME employees repaying through automatic deductions from their salary. Investors/lenders are matched to suitable loan applications, depending on the size, rate of return and duration. SMEs are assessed according to their invoices (size, customer, payment date, etc.),

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Online P2P lending marketplace offering short-term loans to SMEs and customized loans for SME employees repaying through automatic deductions from their salary. Investors/lenders are matched to suitable loan applications, depending on the size, rate of return and duration. SMEs are assessed according to their invoices (size, customer, payment date, etc.), with payment made through escrow accounts to further ensure the security of loans; on top of general manual verification for selecting borrowers. Also facilitates the risk analysis and required legal documentation.
BUSINESS MODEL
P2P online lending marketplace connecting borrowers and lenders at market/bank-comparable rates – about 14–20% per annum interest – while charging 3–5% of the loan as fees. Targets the large number of SMEs without collateral and the unbanked in Indonesia who have extensive credit needs but aren’t served by banks.

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Investree administers the streamline lending and borrowing process by verifying the credit risks of the potential borrowers and lenders through background checks and manual verification before listing them on its platform.

It also helps both parties with the preparation of loan agreements, transfer of funds and other related financial transactions during the loan period.

As a leaner outfit, it is also able to process loans much more quickly than banks – by three days versus 21 days at traditional lenders.

TIMELINE

  • Launch
  • Growth
  • Recent Developments
  • Future Plans
  • 2015–2016 - Investree founded by veteran investment bankers; referenced China, US P2P models. Series A funding from Kejora; partnership with Bank Danamon; processed IDR 65 billion in loans.

    Read in detail:

    The launch

    October 2015, soft launch of P2P online lending marketplace Investree.

    • Founded by three veteran investment bankers seeking to boost access to credit facilities for Indonesian SMEs that tend to be underserved by banks.
    • Based on US and China P2P models.

    May 2016, official launch of Investree with a six-person team.

    • Endorsed by the Financial Services Authority (OJK), Indonesia Central Bank (BI) and Creative Industry Department (Bekraf).

    Products and services

    August 2016, partnership with Bank Danamon: the bank to handle the cash management, or automatic payments and postings (host-to-host service), for loans processed on Investree.

    • Partnership signed at the Fintech Festival & Conference held by OJK.
    Expansion

    2016, processed IDR 65 billion worth of loans.    

    Fundings

    June 2016, secured undisclosed amount of Series A funding from Kejora Ventures.

  • 2017- Secured operating license from OJK, the Indonesian financial regulator; partnerships with Bank Woori Saudara and Zurich Topas Life; opened physical office in Semarang.

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    Expansion

    January, sales partnership with Bank Woori Saudara (BWS).

    • BWS to direct to Investree customers seeking loans but who fall short of BWS's creditworthiness standards.
    • Investree to provide an investment alternative for BWS’s customers.

    March, opened office in Semarang.

    April, partnered with Zurich Topas Life to provide Entrepreneur Digital Credit Protection services to help entrepreneurs and professionals minimize credit risk.

    May, partnered with Indonesia Advertising Company Association P3I to support Indonesia’s creative industry and SMEs with advertising resources and sponsorships.

    Key personnel

      April, Anupama Hoon joined as Head of Product & Innovation from Indian fintech Capital Float.

      • Hoon was heading business development and strategic alliances at Capital Float, including its partnership with Alibaba.

      Policy changes

      May, secured P2P lending license from OJK after increasing its capital to IDR 2.5 billion.

    • Recent Developments

      Has processed about US$20 million in loans to about 700 SMEs to date, with an average loan size of US$20,000–25,000.

      About 97% of its loan requests come from SMEs.

      About 10,000 registered lenders on the platform from across Indonesia, 50% of whom are aged below 30 years old.

      No defaults to date.

      Team of 43.



    • Future Plans

      Launch Shariah-compliant contracts (incorporating fee or profit-sharing in place of interest) in August 2017.

      Expand to Vietnam in 2018 under a JV with a local financial institution.

      Expects to facilitate loans totaling IDR 400 billion in Indonesia in 2017.

      Diversify products, e.g., launch working capital loans for e-commerce firms; focusing on employee loan financing.

      Open offices in major Indonesian cities in 2017.

      Approach institutional investors.

      Further educate consumers about P2P lending platforms.

       

    Updated: 07/2017
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