AwanTunai Receives Debt Funding Over 290 Billion Rupiah from Accial Capital

AwanTunai p2p lending startup announced a "debt" funding of US$20 million (over 290 billion Rupiah) led by private debt investor Accial Capital. Several other banks involved in this round as lenders.

AwanTunai's Co-Founder & CEO Dino Setiawan explained to DailySocial, the fresh money will be fully channeled back in the form of financing for customers. The company also held stock-based fundraising, which is yet to be announced, and will be focused on technology development.

"The US$20 million fund is led by Accial Capital and our partnership with several banks to finance AwanTunai customers," he said yesterday (7/21).

In acquiring debt funding, companies do tend to take from institutions as lenders. Some banks have partnered up include OCBC NISP, Jtrust Bank, Credit Saison, and UOB. There some other banks ongoing process.

"Through this partnership banks can enter the SME segment and channel financing securely."

Accial Capital's CIO,  Michael Shum said in his official statement, AwanTunai has a unique approach in managing credit risk in the micro segment well, quickly, and responsibly. This allows thousands of micro traders to expand their business even during the Covid-19 crisis.

AwanTunai has a flagship product called AwanTempo released in April 2019. This is a financing product for a grocery store in need of additional capital to buy its store products. The company is working with suppliers to provide financing to the small shop.

Dino said that with the debt funding, it is expected to accelerate the expansion of financing of its wholesale suppliers and its flagship products, therefore, more store owners are helped with capital needs. It is said that AwanTempo has distributed funding up to Rp390 billion.

Before introducing its product, the company used to make a loan distribution product for smartphone purchasing with a maximum range of IDR 4 million. In minimizing risk, the company partners with Blue Bird targeting taxi drivers.

"AwanTempo is now our main product. We are no longer continuing the smartphone products," he said.

New product development

Dino admitted that the company was quite lucky to continue financing during the pandemic. He mentioned the grocery shop segment can survive during the PSBB period because it's open to serve basic needs.

"We have a collaborative program with AwanTunai's wholesale partner to help stalls heavily affected by Covid-19, especially those in the office area."

In terms of product development plan, Dino said the company is currently preparing a new product to finance crops for small farmers. They've partnered with foreign NGOs and agricultural product aggregator to channel financing from AwanTunai to farmers. The concept of financing is similar to AwanTempo. The aggregator must know the farmers well to minimize the risk of default.

"The risk is very high. In previous cases, the bank entered the SME segment. The NPL turns out very high because no data appears on the SLIK or incorrect KTP. Therefore, the KUR is stuck inside the banks, there is no safe way to expel KUR to unbanked people," he concluded.

– Original article is in Indonesian, translated by Kristin Siagian