Singapore Islamic crowdfunder partners with Jakarta SME financing aggregator to extend Indonesia footprint

Photo: Alami and Kapital Boost at the signing ceremony inking their partnership in Jakarta on February 2, 2018. Salaam Gateway/Yosi Winosa

JAKARTA – Kapital Boost, the Singapore-based Shariah-compliant crowdfunding platform for small and medium-sized enterprises (SMEs), is partnering with Indonesia’s Alami, a start-up that connects SMEs to Islamic financial institutions, to widen their services in Indonesia, the two companies announced at a media event yesterday in Jakarta.

Kapital Boost CEO Erly Witoyo told Salaam Gateway both companies address the lack of financing available to SMEs in Indonesia. SMEs make up over 95 percent of total businesses and over 70 percent of total employment in Indonesia but less than 15 percent have access to external financing.

Under the partnership, Alami will leverage its SME network in Indonesia to direct businesses to Kapital Boost that will facilitate fundraising and financing from global investors. 

“Basically, both parties believe that we can grow faster by working closely together,” said Witoyo.

Alami, an aggregator for SME financing, will push deals from SMEs to Kapital Boost. In turn, Kapital Boost will provide a referral fee to Alami for any successful financing, said Witoyo.

The collaboration also hopes to increase SMEs’ interest in Islamic finance in Indonesia.

“We have recognised the lack of interest in Islamic finance in Indonesia. We hope that through Islamic fintech, we can help to change the trend and get more people to better understand and appreciate Islamic finance,” Witoyo said.

Around 5 percent of total financial assets in Indonesia are Shariah-compliant. The government last year formed a National Committee for Islamic Finance (KNKS) to implement its strategies to meet its goal for Islamic banking assets market share to reach 15 percent by 2023.

Alami and Kapital Boost believe they can close 24 deals in the first year.

“The aim is to get as many deals as possible from Alami. To start off it will likely be around 2 deals per month averaging around 500 million to 700 million Indonesian rupiah ($37,161 to $52,025) per deal,” said Witoyo.

Alami CEO Bembi Junair said the company has so far partnered with three Islamic financial institutions: BNI Syariah, Bank Mega Syariah and Jamkrindo Syariah, with a total transaction value of 13 billion rupiah.

Alami's products include working capital facilities, invoice financing and term financing.

The start-up won the second prize in business school INSEAD’s venture competition last year, beating 60 submissions across its Singapore and France campuses.

Kapital Boost has raised more than 2.5 million Singapore dollars ($1.89 million) for around 50 SME campaigns since it was founded in July 2015, said Witoyo. More than two thirds of its SME campaigns originate out of Indonesia.

In December 2016 Kapital Boost told Salaam Gateway it had raised more than 1.3 million Singapore dollars for 26 SME campaigns since its launch. 

Its murabahah financing structure was certified Shariah-compliant in December 2016 by Singapore-based Financial Shariah Advisory & Consultancy (FSAC). 

($1 = 13,455 Indonesian rupiah; 1.32 Singapore dollars)

(Reporting by Yosi Winosa; Editing by Emmy Abdul Alim [email protected])

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