P2P lending platform Komunal raises investment to improve the funding access to Indonesia’s MSMEs

Komunal, an online peer-to-peer (P2P) lending company based in Surabaya, Indonesia, announced earlier today that it has secured an undisclosed amount of seed funding led by East Ventures with participation from Skystar Capital.

The company said that the investment will be used to accelerate Komunal’s mission to bridge the funding gap much-needed by the growing population of underbanked Micro Small Medium Enterprises (MSMEs) in Indonesia.

Komunal shared that it conceived their idea when the founders realised the huge credit gap that the country faced in early 2018, that was even more apparent outside Jabodetabek, the area surrounding the capital province. Indonesia’s MSMEs’ credit gap reached IDR 1,000 trillion (US$ 70 billion) per year despite the massive growth of its banking and microfinance sectors.

Indonesia, however, has a substantial and growing mobile phone user base, most of whom are already used to e-commerce and ride-hailing apps. Seeing the opportunity, Hendry Lieviant, who is an ex-Goldman’s credit analyst, started Komunal together with Rico Tedyono and Kendrick Winoto.

Komunal aims to have reliable credit methodology, alternative data & technology, and community partnership with existing regional banks (BPR) and cooperative loan (Koperasi) to improve the funding access to Indonesia’s MSMEs.

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It was registered in OJK in Feb 2019 and began operation in March 2019.

Hendry Lieviant, the Co-founder of Komunal, commented, “MSME is the backbone of Indonesia’s economy, contributing to more than 60 per cent of GDP and 95 per cent of employment. Unfortunately, they often had difficulty in obtaining financing to expand their business from the traditional lenders like banks, due to lack of formal credit records and high operational costs to serve.”

“Through Komunal, we want to help potential MSMEs to thrive and substantially improve Indonesia’s economy, as well as reduce inequality,” he said.

Komunal has only been in operation for eight months but claimed to have channeled around IDR50 billion of loans to good quality MSMEs, mostly East Java area.

Indonesia fintech lending scene itself has seen explosive growth in the past three years. As of June 2019, OJK (Indonesian Financial Service Authority) recorded that the P2P loan transaction reached IDR45 Trillion on a cumulative basis, up 97.7 per cent from December 2018.
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