#Asia Calling small business owners! Modalku might just be the startup you’re looking for


The Founders of Singapore’s Funding Society bring the concept of supporting local SMEs home to Indonesia.


Loan platforms seem to be a growing trend in the Indonesian fintech scene lately, with the appearance of individually targettted services such as Tunaiku, UangTeman, and even a crowdlending site for social businesses called GandengTangan.

e27 recently chatted with a new contender in the field, a P2P lending platform for small and medium enterprises (SMEs) named Modalku.

“In Indonesia, there is a problem that we call the ‘missing middle’, which was [coined] in a research [paper] by Harvard Kennedy School. The research [said] SMEs are not getting the financial help they needed though it is proven from time to time that they are profitable … The current financial system provides alternatives to grow, but in order for SMEs to be bankable [first] they will need capital to grow,” says co-founder Reynold Wijaya during the interview.

Prior to entering the Indonesian market, Modalku founders Wijaya and Kelvin Teo had built a similar service called Funding Societies in Singapore. Seeing how the product worked in that market, they then decided to impliment the concept in Indonesia, which is seen as an ideal market as SMEs contributed 22 per cent to the country’s GDP.

The inspiration to start a P2P lending platform grew when both founders were studying at Harvard University, where they first learned about how crowdlending impacts societies in the US, China, and Singapore.

“It is certainly a different market with China … But there are similarities that makes us believe it could work,” said Wijaya, who is an Indonesian.

The startup is based in Jakarta and is currently in the process of developing its team.

In conducting its business, Modalku received counsels from advisors that include former Minister of Finance Chatib Basri.

Also Read: Now borrow your ‘friend’s money’ on this Indonesian fintech portal

Reynold Wijaya, Co-Founder of Modalku

Reynold Wijaya, Co-Founder of Modalku

Regarding the recent rise of P2P funding platforms in Indonesia, Wijaya admits that Indonesia is indeed an alluring market for such business.

“They are attractive for those who wish to contribute as they cut away the middleman, so the transaction becomes more efficient. If done correctly, it can contribute a lot to financial inclusion,” says Wijaya.

The question is, compared to Singapore, how is operating in Indonesia different? The answer actually lies in rigid pre-screening process.

“In Indonesia, we include psychometric testing in our underwriting system, because the biggest reason for distrust is fraud. In Singapore, they are more organised and it is very difficult to [commit] fraud as it is a very small country,” Wijaya explains.

Also Read: GandengTangan believes in lending money to lend a hand

When asked about any future plan, Wijaya states that Modalku currently focuses on building their presence in the Greater Jakarta Area. Though he does not reject the possibility of expanding to other cities, Wijaya admits local expansion requires the company to fully understand the lending profile in said city.

“We’d like to focus more on learning how to underwrite well. Our motto is to provide quality loans. If we cannot do it then we would not want to expand,” Wijaya said, closing the conversation.

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Image Credit: Modalku

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