After securing a peer-to-peer (P2P) lending license from the country’s financial services authority, PT Investree Radhika Jaya (hereby known as Investree) made an announcement on Thursday that it will begin expanding to Vietnam next year.
According to Daily Social, the Jakarta-based lending marketplace is currently in the process to establish a joint venture subsidiary with an undisclosed local financial institution.
“So we will act as a platform provider, while our local partner will be the player as they are the one who understands the market most. This is exciting as we were able to get a lot of insight, as well as data, on Vietnam,” said Investree CEO and Co-Founder Adrian Gunadi.
From the perspective of regulation, Investree will not be limited by the reciprocal rules that are commonly applied to banking companies expanding internationally. This includes situations such as when regulators from both countries are required to make an agreement before the banks are able to enter a foreign market.
“The regulation will not be applied to us as we will use a local brand instead of the Investee brand. Besides, the reciprocal rule is more on banking institution, while fintech is borderless,” Gunadi explained.
Apart from its entry into Vietnam, Investree also said that it is going to launch a sharia-based lending service in July as due to the strong demand from both borrowers and lenders to set up a lending practice based on the Islamic law.
“We are going to test the market’s response by giving products, pricing, access, and structure that are similar to sharia-based services in conventional banks,” Gunadi said.
Investree is currently applying for certification from the National Sharia Board (DSN). So far, the startup has roped in three small businesses from Jakarta and Surabaya to participate in the pilot project.
Founded in 2016, Investree has to date channeled IDR 214 billion (about US$16 million) to 626 small and medium-sized enterprises, and it is targeting to channel IDR 400 billion (about US$30 million) by the end of this year.
To support the target, Investree is ready to add two new products namely seller financing targeting SME e-commerce and merchant cash advance, a pre-invoice loan product that is destined for the corporation.
The startup is also planning to expand its reach to other cities in the Java Island, starting with Semarang.
This news is published on Reuters.