KoinWorks’ Tactics to Face the Pressure of the Corona Pandemic

KoinWorks mitigates the risk of bad credit so that it is selective in providing loans. This fintech also prepares other strategies during a pandemic, namely related to gold, bonds, and employee salaries. The demand for financial technology or fintech lending services has surged during the corona pandemic.

However, KoinWorks startup has prepared a special strategy to increase transactions during this period. The company launched three new services that were in demand and needed during the Covid-19 pandemic. The three new products are KoinGold, KoinBond, and KoinGaji.

“We see that the three products are suitable for launching during a pandemic,” said Co-Founder and CEO of KoinWorks Benedicto Haryono to Katadata.co.id, Thursday (27/8). Gold, for example, was sought after by investors during this crisis.

Users Can Invest Gold and Bonds

Based on MarketWatch data, the price of gold in the spot market globally has increased by 29% since the beginning of this year (year to date / ytd). Antam’s gold price continues to soar. “Gold is defensive in nature,” he said. Therefore, the company launched KoinGold last July. Users can transact gold through the application.

Then, the startup will present KoinBond this week. Customers can buy investment products guaranteed by the state such as Retail Saving Bonds (SBR), Indonesian Retail Government Bonds (ORI), as well as Islamic bonds such as Retail Sukuk and Savings Sukuk.

Benedicto guarantees that the company will comply with all the provisions for the sale of these bond products. “State bonds are safe,” he said. During this coronavirus pandemic, companies saw a need for financing from business people to pay employees. For that, KoinWorks also launched KoinGaji.

Users or companies can provide early salaries to employees (salary advance) through the product. “This is suitable during the Covid-19 crisis. This product can help MSMEs, if their employees face unexpected expenses,” he said.

Initially Planning to Release 6 New Products in 2020

Benedicto explained that the company initially planned to launch at least six new products this year. KoinWorks then decided to present the three new services, due to pandemic considerations. The company is optimistic that it can attract around 10% of current-active users to use the three new products.

“It’s been around for two months, and the response is good,” he said. The number of KoinWorks users grew 41% during the corona pandemic, to more than 519 thousand people as of last June. The value of financing also increased by 15% on an annual basis (year on year / yoy) in the first half the first of the year.

Of the financing value, 41.8% of which was channeled into the fashion and culinary sector. Meanwhile, 19.61% flowed to the sports and hobby sectors, and 11.5% to the gadgets and electronics sectors. Despite soaring demand, the company has decided to be selective in providing loans during the pandemic.

This is done to mitigate the risk of bad credit or non-performing loans (NPL). From the funding side, startup companies also get fresh funds of US$ 20 million or around IDR 316 billion. This investment was obtained from Quona Capital, EV Growth, and Saison Capital, as well as other investors.

10% of Koinworks Loans have been Restructured

The Covid-19 pandemic has put pressure on the MSME business so that it has difficulty repaying loans obtained from peer to peer lending fintech. This is reflected in the 10% of loans disbursed by PT Lunaria Annua Teknologi or Koinworks have been restructured.

“MSME players remain the focus of our business. During the pandemic, they experienced tight financial conditions, in the end, 10% of our borrowers were restructured,” said KoinWorks CEO & Co-Founder Benedicto Haryono through a virtual discussion on Wednesday (2/9).

Unfortunately, he did not specify the amount of the restructured loan by KoinWorks. However, he explained that since the end of July 2020, loan repayments made by borrowers began to improve.

“The monthly survey of borrowers’ confidence in their business is getting better. They started to have recovered after the PSBB easing. Even though it hasn’t returned to the way it was before Covid-19,” added Benedicto.