Bank Rakyat Indonesia (BRI) has formed a partnership with Modal Rakyat, a fintech startup company that has grown incredibly fast in terms of funding value as well as numbers of lenders and debtors.
As a state-owned bank that is focused on Micro, Small and Medium Enterprises (MSMEs), BRI sees the huge potential of peer-to-peer (P2P) lending fintechs in providing funding schemes for the sector.
Financial institutions that have collaborated with fintech companies focus on P2P lending fall under the purview of the new regulation by Indonesia’s Financial Services Authority (Otoritas Jasa Keuangan, OJK).
P2P lending fintechs’ users are required to have a Lender Funding Account (Rekening Dana Lender, RDL) prior to making any transactions in the Modal Rakyat app.
This is a part of OJK’s supervisory practices in regulating P2P lending practices. Meanwhile, the Lender Funding Account (RDL) also functions as a lender’s safe custodian account that can accelerate user access to financial mobile apps.
Modal Rakyat is integrated with the Fintech Data Center (FDC) and OJK’s Integrated Report Information System (Silaras OJK).
Both systems will track down and ensure the debtor’s financial history to prevent the rise of Non Performing Loans (NPLs).
This is aligned with OJK’s regulations and mission for safer lending and funding practices on Modal Rakyat’s platform.
Modal Rakyat said that it has already disbursed more than IDR 1 trillion to finance more than 5,000 MSMEs throughout Indonesia last year which was made possible through the active support of its stakeholders.
BRI’s collaboration with Modal Rakyat is one of its successful crowdfunding business models in advancing Indonesia’s MSMEs sector.
The bank has already disbursed more than IDR 30 billion in financing to SMEs through the Modal Rakyat platform. Through this collaboration, BRI expects to establish a broader MSME funding ecosystem.
Featured image: Edited from Unsplash
