KinerjaPay Corp (OTCMKTS:KPAY), through its newly formed Indonesian subsidiary, PT Kinerja Sukses Gemilang, said Monday that it has been notified that its lending permit to operate as a microloan lending platform for individuals as well as micro, small and medium enterprises (MSMEs) will be issued in early December.
All MSME-lending platforms in Indonesia must be registered by the country's financial services authority, known as the Otoritas Jasa Keuangan (OJK).
KinerjaPay said the notification came after the company successfully cleared the “fit and proper test,” as well as conducted a live demo of the application and platform last week.
The company said peer-to-peer (P2P) lending connects individuals, institutional investors as well as the company's subsidiary with other individuals or small businesses that need money. Through these platforms interest rates are normally higher than those charged by banks, but are considerably lower than rates offered on the black market by loan sharks. The Indonesian market for such loans hit $3.1 billion in June, compared to $19.6 million in 2016, according to the OJK.
The Indonesian Market for non-bank loans is vast. There are 63 million MSMEs, of which only 26% have access to financing, according to government data. In 2016, the OJK estimated that these businesses had annual unmet financing needs running over $68 billion.
Eyeing a large opportunity
Similarly, only 29% of Indonesian's 186 million lower to middle income, working-age individuals have access to credit.
KinerjaPay said it has arranged non-equity sources of capital to rapidly expand the business. It intends to act as a principal using its own platform to offer micro loans to small business as well as individuals who have verified employment.
In addition, the company will earn an agency fee for allowing individuals and small businesses to use its platform. The company believes that this is the "killer app" that will propel its business to profitability in the near term.
"Over the past months the company has diligently worked to achieve this license that we applied for earlier this year. Though it has taken longer than we anticipated, we are excited that we have been informed we passed all the qualifications to reach certification," said KinerjaPay Corp Edwin Ng.
The company's representatives and teams led by Anoki Kiyoshi, had taken the requisite aptitude tests, "fit and proper test" as well as conducted a live demo of the application in order to be in full compliance with regulations.
Jakarta-based KinerjaPay is a micropayments and microloans business offering digital payments and an e-wallet system.
Contact Uttara Choudhury at [email protected]
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