‘Online Chat’ Technology Helps Connect ‘Offline’ Businesses to Financing

Two leading Indonesian finance companies have found an innovative way to target hard-to-find businesses that need finance. PT BFI Finance Indonesia Tbk and PT Indosurya Inti Finance signed an MoU with Mekar (PT Sampoerna Wirausaha) on Thursday (16/3) in Jakarta, taking a bold step to use an innovative new service called Mekar Go. This will help them finance more Micro, Small and Medium Enterprises (MSMEs) that are otherwise virtually unknown to the financial services sector.

Sutadi, Retail Business Director PT BFI Finance Indonesia Tbk shake hand with Thierry Sanders, CEO Mekar (PT Sampoerna Wirausaha)

Mekar Go is a new, innovative service offered by FinTech lending company Mekar (PT Sampoerna Wirausaha). Using mobile technology, Mekar Go connects ‘offline’ MSMEs to Banks and other financial institutions that find it hard to go the ‘last mile’ to find them.

Under the MoU, Mekar will connect the MSMEs that are in need of financing to BFI Finance and Indosurya Inti Finance through the Mekar Go service. Mekar Go will use its extensive network of agents throughout the country to find and identify small businesses that can not be found online.

Mekar Go agents collect the business owners’ data and contact information and take photos of the business location and activities. They will also ask business owners the amount of loans they need to help them grow their businesses. Using a chatbot technology integrated into messaging apps like Facebook Messenger, Line and WeChat, agents submit this information to the system and Mekar Go will verify the data. Once verified, banks and other financial service companies can finance the loans.

The Mekar Go service provides a solution to the problems faced by many MSMEs in Indonesia. Small informal businesses with little to no collateral to offer have often faced difficulties in getting a much needed bank loan to help them grow. The majority of the 56 million MSMEs in Indonesia are considered unbankable and their predicament is even made worse by the fact that a large part of them have limited access to internet.

Indonesians are rapidly going online. In only two years, more than 40 million Indonesians used the internet for the first time. This is a 51.8% increase in internet users between 2014 and 2016. However, this is hardly a case of Indonesian government successfully making internet access available for everyone across the country.

A closer look at the data shows that 65% of Indonesian internet users are from the island of Java. As for the other regions, the internet is still not always readily accessible.

For many SMEs, this poses a problem. Banks and other financial institutions such as multifinance companies usually post loan information – such as application procedures, interest rates and branch locations, on their websites. The chance to find them and make use of their services is, therefore, much smaller for the ‘offline’ businesses.

At the other end, financial service providers often find identifying businesses that need financing to be too much of a hassle and very costly. They have to walk the streets, enter the markets and knock on doors in order to tap into the local and small businesses, most of which cannot be found online.

“The Mekar Go service will definitely help us cut cost in finding the businesses that need loans. This is a more cost and time effective way to do it,” BFI’s Retail Business Director Sutadi said.

With some 300 offices across Indonesia, BFI Finance is one of the largest multifinance companies in the country and has been helping Indonesians by financing their businesses.

Mulyadi Tjung, Managing Director Indosurya Inti Finance shake hand with S. Randy Gunadi, Commercial Director Mekar (PT Sampoerna Wirausaha)

Mulyadi Tjung, Indosurya Inti Finance’s Managing Director, said, “As a multifinance company focusing on productive loans, particularly in the MSMEs sector, we believe the Mekar Go service will help us cater to a larger market.” Indosurya currently has some 50 offices throughout Indonesia.

“This agreement is a double-win. It helps reduce the cost of borrowing via BFI’s refinancing service and fosters productive lending via Indosurya”, says Mekar CEO Thierry Sanders. “Both foster growth of small businesses across the country and help strengthen the economy”.

The Mekar Go service is currently only accessible to a few financial institutions like BFI Multifinance, Bank Sahabat Sampoerna, Indosurya Inti Finance and several rural banks (BPR). Mekar invites interested parties to register here.