Pinjam CEO and Co-Founder Teguh Ariwibowo also explains why he does not measure success through loan size
Pinjam Co-Founder and CEO Teguh Ariwibowo received the honour of being one of the 12 Indonesians named in the most recent Forbes 30 Under 30 Asia list.
When e27 visited him at the company’s headquarter in South Jakarta, we just had to ask him how it was like.
“It was amazing,” he answered simply.
There are indeed good reasons for the entrepreneur to celebrate, but first we need to understand what the startup is all about.
Pinjam is an online platform that targets individuals and small and medium-sized entrepreneurs. Apart from providing loan for entrepreneurs to run their businesses, it also attempts to “Uberise” refinancing or pawnbroking service by connecting users to pawnbrokers online.
Users are able to use an online appraisal feature to predict the value of the personal property used as collateral. After their application is submitted, Pinjam’s partners will then pick up the collateral and call the users back with their decision.
The startup currently partners with 25 logistics companies, gadget and jewellery shops, car dealers, and pawn houses.
It has also partnered with national postal service Pos Indonesia, which enables the company to reach a wider audience through 50,000 post offices nationwide.
“In the future, even your own neighbour can be an agent for Pinjam pawnbroking service. So people living in Madiun or Natuna islands do not have to travel very far to go to pawn houses, which might cost them a lot for transportation,” Ariwibowo explained the vision he has for the service.
The co-founder also stated that the startup is currently developing a new feature that will allow agents to visit and determine the loan on-the-spot, without having to take the collateral to Pinjam partners for appraisal. The new process is aimed to make application faster and easier.
“We are also looking forward to launch something new in May, but I can’t really say anything now,” Ariwibowo stated.
Pinjam is currently run by 85 employees with some of its team members working “semi-remotely” in Surabaya. The company was hosting a recruitment for management trainee programme when e27 was at their office.
The startup has raised an undisclosed Series A in May 2016 from a local investor, who declined to be named.
“This is the year we validate ourselves,” Ariwibowo said candidly.
“In 2015, we were at the stage of finding out whether we will have a user, or whether there will be people using our service. Turned out we have, and we try to go from there. 2016 was the year we build up distribution by convincing partners to work with us,” he continued.
“So for 2017 we will focus on implementation, through collaboration and empowerment,” he concluded.
By end of 2016, Pinjam has secured up to 2,500 account holders, and Ariwibowo sees this as a foundation for the company to be more “well-executed.”
“We measure our success based on the number of account holders that we manage to help. So it’s not about loan size, because our target market borrows only IDR5 million (US$375), IDR3 million (US$225). Some even borrowed for as low as IDR500,000 (US$37.5),” he said.
In the name of financial inclusion
Pinjam’s story began when Ariwibowo realised that there must be many small and medium-sized entrepreneurs in Indonesia who have to go through the struggle he did. Managing cash flow is hard enough, so is getting access to capital to increase their capacity.
“That’s why we decided to go into online pawnbroking, because that was the simplest thing we can do to increase credit access for SMEs,” he explained.
This number is also expected to rise as the government has made the move to legalise on-balance sheet lending platforms.
Though Ariwibowo would still acknowledge these startups as Pinjam’s competitors, he would rather focus on the big mission, instead.
“The fintech industry is too big for us to say that we compete against each other. The unserved market in Indonesia remains big; there are still many that have no access to formal financial institutions, about 64 per cent [of the population],” he explained.
“The fact that there are many other fintech startups [catering to SMEs] is a good start for all of us to move together,” he added.
Recently, an ongoing trend in the industry reveals that banks and fintech startups are not the only parties that play a crucial role in championing financial inclusion in Indonesia.
Ride-hailing startups such as Go-Jek and Grab have been pushing for intensive use of their in-platform cashless payment service; Grab had even confirmed its acquisition of O2O e-commerce platform Kudo as part of its master plan for Indonesian market.
Even online marketplaces such as Bukalapak had introduced a feature to purchase mutual funds on its platform, as part of an effort to make mutual funds investment more accessible.
Ariwibowo sees this as a shared value between the companies, though it also possesses a unique challenge for fintech startups
“If we want to talk about financial inclusion, we should give people access, and if starts with payments,” Ariwibowo said.
“As for e-commerce companies innovating their way to fintech … [As a fintech company] we see this as a calling to innovate faster. Everyone can declare that they have their own technology, but these guys already have their own market, their own pattern … While we still have to grow both organically or through growth-hacking,” he added.
“In the end, in the future, we won’t be going to the bank to get financial services,” he closed.
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