New Oikocredit partner fills SMEs’ capital needs in Indonesia

Oikocredit’s first fintech partner in Southeast Asia, Validus, will use technology to improve financial inclusion among Indonesia’s small and medium enterprises (SMEs), following a loan of EUR 2.4 million.

Batumbu, the Indonesian subsidiary of Singapore-headquartered Validus, will use the funds to offer affordable, tailored financial services to underserved SMEs across the archipelago.

Small businesses in Indonesia, as in other countries, have a hard time accessing funds from commercial banking institutions for their working capital needs, in part because of compliance and risk issues. Validus uses proprietary data and artificial intelligence technologies to close the gap, providing financial products tailored for SMEs and an alternative credit underwriting model.

The World Bank’s International Finance Corporation estimates Indonesia’s MSME financing gap at USD 234 billion. The IFC has previously estimated that up to 54% of SMEs are interested in obtaining a bank loan.

Read the announcement press release here