- Indonesian microlender Amartha eyes Southeast Asia expansion opportunities.
- Company navigates regulatory tightening by focusing on productive loans.
- Amartha secured $285M financing, hints at potential IPO milestone.
Indonesian fintech firm Amartha is eyeing opportunities to expand across Southeast Asia, where many microentrepreneurs face challenges such as limited credit access and low levels of financial digital literacy.
In an interview alongside this year’s Money 20/20 conference, Amartha CEO and founder Andi Taufan Garuda Putra said his company can capitalize on its experience of underwriting loans for Indonesia’s grassroots segments on a large scale, though he did not specify Amartha’s target ASEAN markets.
Riding the regulatory waves without making a splash
Otoritas Jasa Keuangan (OJK), Indonesia’s financial services authority, has tightened its grip on lending.
Though the OJK has lowered interest rate limits to curb predatory practices, Taufan noted this regulation primarily targets consumer loans used for purchases that don’t generate income.
Amartha focuses on productive loans for small businesses and entrepreneurs, posing lower risks.
Founded in 2010, Amartha nearly collapsed before pivoting from conventional microfinance to peer-to-peer lending in 2015.
The company said it has been profitable on a net income basis for the last three years.
Amartha operates a marketplace linking borrowers, particularly those in lower-tier cities outside Java, with institutional and individual lenders.
Full speed ahead on Amartha’s profitable voyage
Taufan explained the company typically receives 60% of the interest rate, while lenders get 40%. Though Amartha uses its own credit scoring system, it employs field agents to assess borrowers and their assets.
Taufan mentioned borrowers from lower-income backgrounds often show more responsibility and appreciation for the loans.
In 2023, Amartha secured commitments of US$285 million in MSME financing from Community Investment Management, International Finance Corporation, and Credit Saison.
Taufan did not rule out an IPO, noting “it’s a milestone we want to achieve.”
To read the original article: https://www.techinasia.com/p2p-lender-amartha-sets-sights-on-regional-expansion
