Fintech Player Extends Loans to Help Retail Supply Chain
AwanTunai, a financial technology (fintech) company in Indonesia, helps the retail supply chain survive the coronavirus pandemic as various sectors shift to digital.
The company is lending to startups and micro, small and medium enterprises to finance their digital transformation. It has disbursed RP 407 billion or $27.8 million to wholesalers and retailers since 2019.
The fintech firm is also offering a point-of-sale solution and lending program AwanTempo to boost the sales of warung (or kiosks) by helping them maintain a good number of stocks.
In an interview with The Jakarta Post, AwanTunai Chief Executive Officer Dino Setiawan said that the pandemic has severely affected Indonesia’s retail supply chain.
The fintech player was keen on building a technology infrastructure to collect and review data from the small business. Such information was not readily available because the kiosk businesses are transacting via cash and only doing bookkeeping with pen and paper, Setiawan said.
The fintech firm official said that digitalization could help identify data such as the volume and value of products the wholesalers sell to the small retailers. Also, it can point out the kinds of products and the date of transactions.
However, the AwanTunai chief clarified that the firm was not eyeing to be the lender for the warungs. Instead, the company wants to bridge small enterprises to the banks by producing a credit scoring method.
Setiawan said that AwanTunai is trying to show the banks that warungs can settle their borrowings on the due date.
With AwanTunai recently receiving $20-million capital, Setiawan said it’s prioritizing to help the small businesses sell staple products and fast-moving consumer goods.
Impact of Pandemic to the Fintech Firm, Retail Supply Chain
Setiawan said that the company’s retailer clients saw their revenues decline by 30 percent on average. Because of this, their capability to settle their loans plunges to 88 percent amid the current economic slump from 98 percent last year.
The company’s clients said they observed a change in consumer behavior, with more people only spending on essential goods.
AwanTunai also noticed that people opt to buy their goods from warungs because they are closer to the houses. Many are still avoiding visiting supermarkets, given the risk of being exposed to the coronavirus.
Setiawan added that while there were fewer loans, more clients downloaded the AwanTunai mobile application amid the pandemic.
Looking into the Future
The fintech firm is eyeing to have additional 200 wholesaler partners and some 10,000 warung clients. It is also targeting to release some $10-million borrowings by the end of 2020.
The company is also targeting to make financing to millions of warung and small farmers more accessible.
At the same time, AwanTunai wants to have a reach across the country. Currently, it is available in Jakarta and East Java. The company is also eyeing to tap Myanmar and Bangladesh markets in the future.
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