Akulaku Receives Funds from Bank Jago for Credit Expansion

Financial technology startup (fintech lending) Akulaku Finance received additional funding from Bank Jago. The fresh funds will be used to expand in the first semester. President Director of Akulaku Finance Indonesia Efrinal Sinaga said the bank, which is supported by Gojek, provided funding of IDR 100 billion last year. This is used to increase credit distribution.

This month, the two companies signed an agreement to add funding facilities. “This is a form of Bank Jago’s continued support for Akulaku Finance in accelerating financial inclusion and expanding access to finance,” Efrinal said in a press release, Monday (29/3).

However, the company did not mention the value of the additional funding. Efrinal only said that this fund will be used to increase the expansion of financing distribution in the first semester. Akulaku targets the distribution of financing to grow at least 50% on an annual basis (year on year/yoy) this year.

They’re optimistic that this target can be achieved. The reason is that Indonesia’s economic growth prospects are increasingly conducive and improving after the Covid-19 vaccination. Also, there has been an increase in the adoption of digital financial services due to the corona pandemic.

“The pandemic has become one of the game changers that has changed various habits of the people into distancing and digital, contactless, and cashless. Including in terms of accessing financial services,” he said in an official statement, Tuesday (9/3/2021).

This financing company part of the Akulaku Group is also optimistic that the use of the Akulaku paylater feature is increasingly in demand not only because it guarantees ease of transactions, but also provides flexibility for service users in managing cash flow when facing economic pressures.

The Company also Collaborates with BPR

Efrinal said, Akulaku Finance’s financing distribution is still continuing the growth trend in the early quarter of 2021. In addition to digital banks, Akulaku is actively collaborating with Rural Banks (BPR).

In February, this fintech partnered with four BPRs, namely BPR Supra Artapersada, BPR Naribi Perkasa, BPR Ciledug Dhana Semesta, and BPR Rama Ganda. Akulaku also actually has its own digital bank. In 2019, Akulaku will legally become the largest shareholder of Bank Yudha Bhakti, which is now named Neo Commerce.

One of Akulaku’s shareholders is Alipay, part of the digital financial giant from China, Ant Group Financial. Ant Group is a subsidiary of Alibaba. Meanwhile, Jago Bank is aggressively engaging fintech lending to reach consumers who are difficult to reach by banks.

“This is to have a bigger business scale,” said the Head of Business Partnership Bank Jago Sonny Christian in a webinar entitled “Fintech 2021”, three weeks ago (9/3). He said that fintech isn’t an opponent for digibanks. “We believe that the bank’s collaboration with fintech can complement each other,” said Sonny.

Digital Bank and Fintech Have Their Respective Advantages

Digital banks excel in terms of liquidity. Meanwhile, fintech is more agile in reaching customers who are underbanked. Apart from Akulaku, Bank Jago channeled IDR 50 billion in funding through Akseleran earlier this year. Through this collaboration, banks become strategic institutional lenders or super lenders.

President Commissioner of Bank Jago Jerry Ng assessed that collaboration with the digital technology ecosystem is very much needed as a new era bank business model. Even so, this step faces many challenges.

“The bank is actually a utility,” said Jerry at the Katadata Indonesia Data and Economic Conference 2021, in collaboration with East Ventures, last week (23/3). He explained that the digital technology ecosystem is a means used by customers to meet needs such as shopping, eating, transportation, and so on.

However, what this ecosystem does is ultimately related to banks in the framework of a payment system, borrow-borrow, or save-saving. “This is what I see about the relationship between banks, which used to be a part of the ecosystem,” said Jerry.