March 7, 2017 3:46 pm JST

Bank Mandiri bets on peer-to-peer lender

Acquisition could help state-owned bank lend to small businesses

WATARU SUZUKI, Nikkei staff writer

Eddi Danusaputro, left, CEO of Mandiri Capital Indonesia, and Andi Taufan Garuda Putra, right, founder and CEO of Amartha Mikro Fintek, hold a press conference in Jakarta on March 7.

JAKARTA -- The venture capital arm of Bank Mandiri, Indonesia's largest state-owned bank by assets, on Tuesday said it has acquired a stake in peer-to-peer lending startup Amartha Mikro Fintek.

Amartha Mikro develops credit-scoring technology that evaluates small businesses that conventional banks have deemed too risky to lend to. It then connects them with individual lenders over a website.

It specializes in loans under 10 million rupiah ($750) and has a network of agents in Java that helps potential customers submit online applications.

Bank Mandiri, meanwhile, finds itself in a transition phase. Its main corporate banking division is facing more and more competition. As a result, it is trying to find new ways to lend to the archipelago's millions of small companies.

Amartha Mikro aims to use the fresh capital and pick up some of Mandiri's expertise to boost the number of its borrowers from 30,000 businesses to 100,000.

Mandiri Capital Indonesia, the group company that made the acquisition, did not disclose the value of the investment but said Amartha Micro's fundraising round, which included other venture capital firms, was below $5 million.

Last year, Indonesia's financial regulator issued guidelines for peer-to-peer lending. The majority of the country's 60 million small businesses lack a reliable credit history, and thus find themselves ineligible for bank loans. The problem is ripe for peer-to-peer solutions.

Yet the fledgling industry has struggled to attract substantial investment, partly due to regulatory uncertainty. Last year's guidelines and Tuesday's announcement, however, could break the ice.

Mandiri is majority-owned by the government.

Established in mid 2015, Mandiri Capital focuses on investing in startups across payment, lending and back-end technology businesses. It has so far announced investments in three startups.

Asia300

PT Bank Mandiri (Persero) Tbk

Indonesia

Market(Ticker): JKT(BMRI)
Sector:
Industry:
Finance
Regional Banks
Market cap(USD): 23,275.47M
Shares: 23,333.33M

Get Insights on Asia In Your Inbox

To read the full story, Subscribe or Log in

Get your first month for $0.99

Redeemable only through the Subscribe button below

Once subscribed, you can…

  • Read all stories with unlimited access (5 articles per month without subscription)
  • Use our smartphone and tablet apps

To read the full story, Subscribe or Log in

3 months for $9
SUBSCRIBE TODAY

Take advantage of this limited offer.
Subscribe now to get unlimited access to all articles.

To read the full story, Update your account

We could not renew your subscription.
You need to update your payment information.

To read the full story, Subscribe or Log in

Once subscribed, you can…

  • Read all stories with unlimited access (5 articles per month without subscription)
  • Use our smartphone and tablet apps

To read the full story, Subscribe or Log in

3 months for $9
SUBSCRIBE TODAY

Take advantage of this limited offer.
Subscribe now to get unlimited access to all articles.

To read the full story, Update your account

We could not renew your subscription.
You need to update your payment information.