Leading microfinance institution (MFI) Bank Rakyat Indonesia (Bank BRI) has announced a partnership with P2P lending marketplace Investree.

This collaboration is aimed at supporting entrepreneurs in the creative industry (handicrafts, design, fashion, architecture, culinary, ad agencies, etc.), seeking secure working capital loans and thrive in the market.

Bank BRI’s creative industry lending will take the form of invoice financing, thus not requiring borrowers to put up traditional forms of collateral.

The MFI is earmarking IDR 2 trillion (more than US$143 million) for digital lending via Investree, a large portion of which will be allocated for the creative sector.

Also Read: Indonesian P2P lending startup Investree raises Series B funding, expands to Thailand

The two companies also intend to build a conducive financial ecosystem for Indonesian creative startups and MSMEs, without forcing them to turn to loan sharks and unlicensed P2P lending platforms.

“We know there is a gap between banks and several business sectors in Indonesia. We need to work with fintech companies so that we can reach more people, especially MSMEs in the creative sector,” said Bank BRI’s Director (Digital Technology and Operations) Indra Utoyo.

Indonesia’s Chamber of Commerce and Industry estimates the local creative sector contributed significantly to the national economy in 2019. A great deal of capital has to be made available to entrepreneurs to continue the sector’s growth in 2020. But the formal financial sector is still ill-equipped to reach these companies via traditional mechanisms.

There are unique factors to lending in Indonesia, such as the massive unbanked population combined with complex regulations, but there are also hurdles unique to the creative industry.

Creative businesses typically do not have physical assets like land or machinery to put up as collateral for a bank loan. As businesses, they are often seen as too risky and therefore denied access to enterprise credit. This is where Bank BRI comes in with Investree.

Founded in 2015, Investree connects borrowers with the right lenders and make digital financing more accessible to both sides via a P2P online marketplace.
—

Image Credit: 123RF Stockphotos

The post Bank BRI-Investree partnership earmarks US$143M to support creative entrepreneurs in Indonesia appeared first on e27.