Modalku and Carro Announce Co-Investment in Bank Index

The Modalku Group (known as Funding Societies in Singapore, Malaysia and Thailand) together with automotive trading platform Carro announced a co-investment in PT Bank Index Selindo (Bank Index). There is no mention of the value of this joint investment.

In his official statement, Modalku Co-founder & CEO Reynold Wijaya said, this collaboration supports Modalku’s business strategy to enter the neobank industry. He also considered Bank Index as the right partner to develop and empower MSMEs.

“Modalku Group has been a partner in the banking industry in all of our operational areas since 2015. This partnership with Bank Index will take fintech and banking collaboration to the next level. We want to support MSMEs across banking, payments, loans and digital services,” said Reynolds.

Carro Indonesia CEO Jeremy Ong also said that this co-investment step was a natural option to be part of the journey to build capabilities and infrastructure in the automotive ecosystem, both in terms of purchasing, MSMEs, to insurance. Carro previously also entered the ranks of Allo Bank investors with Bukalapak and Grab.

For information, Bank Index is a private bank with 52 office networks in Greater Jakarta, Java, Sumatra, Bali and Batam. Bank Index has a focus on the MSME segment and operates in the commercial supply chain.

The Modalku Group is a funding platform for MSMEs in Southeast Asia that has licenses in Singapore, Indonesia, Thailand, Malaysia, and currently also operates in Vietnam. The company offers loans of up to IDR 2 billion for MSMEs that have difficulty with capital.

According to the latest data, the Modalku Group has disbursed business loans of Rp. 33.02 trillion to the number of transactions reaching 5 million MSME loans.

Building Neobank Through Bank Index

A digital funding platform for MSMEs, PT Mitrausaha Indonesia Group (Modalku) is optimistic that the step to participate in providing neobank services will have a positive effect on boosting its performance as a financial technology platform.

For information, the Modalku Group has recently been involved in a joint investment in Bank Index (PT Bank Index Selindo) with an undisclosed nominal. Another party involved is Carro, a car buying and selling platform that is actually close to Modalku because they were both injected with SoftBank Vision Fund 2 investment.

Modalku Co-Founder & CEO, Reynold Wijaya explained that his party has a dream to provide comprehensive financial services to MSMEs, starting from banking, payments, loans, and other digital services according to their needs.

Reynold has not been able to reveal any new innovations that will launch, nor is the target of the Modalku platform this year after the emergence of various new products. However, Reynolds provided a grid that reaching more potential MSMEs would be the main focus.

Financial Inclusion Via Neobank

A number of fintech players are busy announcing their collaboration or synergy with banks. The purpose of this collaboration is none other than to expand financial services, especially to the MSME and unbanked segments. Previously, KoinWorks collaborated with Bank Sampoerna to launch the KoinWorks NEO neobank service.

At that time, KoinWorks Co-founder & CEO Benedicto Haryono said that neobank was the initial gateway to increase the capabilities of MSMEs, which were still underserved and underbanked, before advancing to a worthy of access to credit.

As summarized in the AFTECH 2021 Annual Report, OJK noted that the financial literacy index in Indonesia rose 8.3% from 29.7% in 2016 to 38% in 2019.

However, fintech players in Indonesia still face big challenges in expanding their business outside Jakarta, where 23% and 19% of respondents admit that it is difficult to expand outside Java and rural areas due to culture (20%), infrastructure (44%), and financial literacy (55%).