Funding Societies co-founders Reynold Wijaya (left) and Kelvin Teo.
Modalku, Indonesia-based online peer-to-peer (P2P) lending platform, has raised an undisclosed amount of debt funding from a Dutch impact investor, Triodos Microfinance Fund and Triodos Fair Share Fund, financial inclusion funds managed by Triodos Investment Management.
The company said it will use the funds to accelerate its vision of driving financial inclusion and widening credit access for the region’s micro, small, and medium enterprises (MSMEs).
Modalku was established in 2016, with the aim to connect underserved yet creditworthy MSMEs in Southeast Asia with both retail and institutional lenders. The approach of the company enables small businesses to receive working capital financing for business growth with no collateral requirements.
Modalku also operates in Singapore and Malaysia known as Funding Societies. It claimed to have facilitated around EUR 650 million into more than 1.1 million MSME loans throughout Southeast Asia.
In 2019, Modalku said that it has focussed its strategy on the micro sector, launching a microfinancing product tailored to the segment’s needs and increasing market penetration to traditional market sellers with expansion in the planning. It has also established partnerships with e-commerce platforms to provide financing solutions for online merchants throughout Indonesia, many of whom are part of the micro-enterprise sector.
Reynold Wijaya, Co-Founder & CEO of Modalku, said, “The funding from Triodos Investment Management marks a new milestone for us. Going forward, we want to reach more MSMEs. According to a 2019 PwC study, 74 per cent of MSMEs still faces a lack of financing access. We believe that expanding credit access will not only drive MSME growth but also benefit the economy and our societies.”
Wijaya further emphasises on MSMEs’ role as the backbone of the country’s economies. “Their growth improves the finances of individual local users to the larger societal ecosystem. On our platform, retail lenders can affordably finance these businesses for an alternative investment with attractive returns. Being able to create such a connection is close to a local value we call ‘gotong royong’, where all parties work together to achieve a common goal,” he added.
Modalku is Triodos Investment Management’s newest addition to its portfolio. For 25 years, Triodos Investment Management has provided finance to upcoming and well-established financial institutions across the globe that demonstrate a sustainable approach toward providing financial services to those traditionally excluded.
Modalku has previously raised US$25 million in a Series B funding round led by SoftBank Ventures and supported by Sequoia India, Alpha JWC Ventures, and Golden Gate Ventures.
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