KinerjaPay Corp (OTCMKTS:KPAY) CEO Edwin W Ng said Monday that the company was eyeing significant revenue streams after the country's financial services authority, known as the Otoritas Jasa Keuangan (OJK), granted its newly formed Indonesian subsidiary, PT Kinerja Sukses Gemilang, a full permit to operate as a microloan-lending platform.
"Receiving one of the few certifications from the OJK while they are aggressively regulating foreign non-registered lenders presents KFUND the opportunity to rapidly grow into a highly profitable online lender,” said CEO Ng in a statement.
“The agency and principal revenue streams will be significant as we execute. Our access to US capital will give us a significant advantage over local competitors."
Jakarta-based KinerjaPay has a target of reaching 25,000 loans per month down the road to achieve a minimum $5 million market size on a monthly turnover to turn profitable.
“Based on achieving small market shares, it is possible to record revenues close to $5 million/month sometime over the next two years. Of course, we need to execute,” said Ng.
The company said KinerjaPay successfully passed numerous stress tests conducted by Indonesia’s financial regulators.
“Achieving certification after nine months of testing is a testament to the many dedicated employees involved,” said the company.
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 micro, small and medium enterprises, 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.
Against this backdrop, KinerjaPay believes it can easily process 25,000 loans a month. It estimates that the average individual loan will be in the range of $200-to-$300, whereas the average micro-loan for business owners will range between $1,000-to- $5,000. The repayment will typically occur within 30-to-90 days, depending on the terms selected.
Jakarta-based KinerjaPay is a micropayments and microloans business offering digital payments and an e-wallet system.
Contact the author Uttara Choudhury at [email protected]
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