Fintech Auction Hall Fundo Offers New Short-Term Investment Alternative
FSB Indonesia, a financial technology (fintech) company that has a license and complies with regulations from the Directorate General of State Assets (DJKN) of the Ministry of Finance of the Republic of Indonesia, launched the Fundo product.
It’s as the first securities auction fintech platform in Asia and the only one in Indonesia that provides an innovative future fintech ecosystem.
Fundo aims to improve the local economy in Indonesia by providing solutions for everyone, from beginner and professional investors to individual and institutional investors, to help them achieve their financial goals and increase their investment portfolio.
Through a moderate risk approach and on the principle of earning based on profit, not interest, Fundo supports MSMEs and helps create jobs.
This startup was founded in 2019 by Aida Sutanto, Co-founder of Investree who has a wealth of other experience in the banking world. In a virtual press conference, Aida explained that Fundo combines the principles of an auction house with fintech, which offers a unique and better process for selling and buying securities.
“Our auction platform has been intrinsically designed and regulated to be able to offer investment products based on profit, not interest,” he said, Thursday (31/3).
He also emphasized the difference between Fundo and p2p lending or banking. Some of the differences, namely the umbrella of supervision under the Directorate General of State Assets (DJKN) of the Ministry of Finance; the basis of the agreement is sale and purchase; while in p2p lending or banking it is lending and borrowing.
Then, from the term yield used at Fundo is profit that is fully obtained through discounts (deductions) from securities, not interest; The funding term is called a lot and is quickly filled in a day, while in p2p lending it takes a week to two weeks until the funding needs are met.
The Process Of Buying And Selling Auction Letters
In the process, Fundo connects sellers and buyers through fair pricing mechanisms and a competitive online auction process for securities.
For sellers (MSMEs) who need working capital support, it can be an alternative beyond the currently available options. Meanwhile, for individual and institutional investors, Fundo provides investment alternatives with short-term returns with moderate risk.
The securities auctioned by MSMEs to obtain working capital are their accounts receivable (AR). AR itself is a transaction of selling goods or services to clients whose payments are made on credit.
AR is in the form of an invoice that has legal force because it will later be sent to the customer and must be paid within a predetermined period of time.
The company conducts solid due diligence and executes transactions only with businesses with a strong financial track record and have receivables from reputable companies.
Aida gave an example, the series of mitigations carried out was to assess the risk of financial performance, sales of invoices, payor profiles, operations, and others to avoid default.
“Fundo sells securities from bona fide companies, we are very selective in choosing selling companies. Usually we choose those who have access to supply to big companies because usually they already know the procedures there.”
The company also carries out a series of risk mitigations for auction letter buyers, such as insurance with different percentages. The greater the insurance coverage taken, the percentage of profit that can be taken is not as big as if you do not take insurance at all.
The average profit offered is 10% -18% per year. So far, the Fundo platform has accommodated sales of securities reaching IDR 2.2 trillion from 250 MSMEs. Aida targets this year to increase sales of securities by reaching 5 thousand MSMEs.
“Introducing this new instrument will indeed take time, just like the initial p2p lending appeared. But we will continue to educate the public by holding various seminars that invite legal experts, and so on,” he concluded.