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Modalku Launches Virtual Credit, Help SMEs Control Cash Flow with Paylater


In order to strengthen its position as a digital MSME funding platform, Modalku launched “Virtual Credit”, a paylater facility to support the business needs of Micro, Small and Medium Enterprises.

Previously, Modalku had launched a collaboration with BukaPengadaan to launch this B2B paylater initiative.

Modalku Virtual Credit is a business paylater facility in the form of loan services provided in the form of a credit limit that can be used to transact digitally on online/offline platforms or suppliers.

With a fast approval process, this facility can be used to increase the stock of goods, develop businesses, as well as the urgent needs of MSME actors.

This Modalku Virtual Credit facility can be used by individual MSMEs and business entities (PT/CV) to manage and control business cash flow with easy access. The limit given will be adjusted to the scale of the business.

The individual MSME category can get a credit limit of up to Rp. 100 million, while for MSMEs with business entities it is up to Rp. 500 million. MSMEs can apply for this facility without the need to have collateral.

Has Collaborated with Many Companies

Currently, Modalku has collaborated with more than 100 online and offline suppliers to assist MSMEs in meeting business needs.

Several online platforms that have collaborated include JD.ID, Blibli, Bizzy, Jubelio, and will continue to grow as services develop. With the paylater facility for this business, the company aims to provide flexibility to MSMEs.

“They can get a longer maturity and we can them to control cash flow better because income often fluctuate from time to time, especially during the pandemic,” said Arthur Adisusanto, the Head of Growth and Development Partnership Modalku.

Cash flow itself is the lifeblood of every line of business. The ability to be able to manage income and expenses is an essential science in developing any business. When cash inflows are slower than outflows (negative cash flow), running and growing a business becomes difficult.

In selecting prospective customers for this feature, there are 4 main processes. First, by conducting pre-screening to validate the completeness of documents such as ID cards and NPWP.

After that, an in-depth analysis will be carried out to ensure the business owner can repay the loan, one of which is seen from the credit scoring.

Then, at the onboarding stage, business people must sign a loan agreement document or e-KYC. Finally, there is a layer of security that will detect the use of credit for business or consumptive purposes.

Credit distribution for MSMEs in Indonesia

One of the potential developments of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia is influenced by the number of lending to MSMEs which generally grows every year.

MSME loans are given to micro, small and medium business debtors who meet the definition and criteria for Micro, Small, and Medium enterprises as stipulated in Law no. 20 of 2008 concerning SMEs.

MSMEs are productive businesses that meet business criteria with certain limits on net worth and annual sales results based on the law. In Indonesia, Modalku is not the only platform that targets the MSME market in lending.

There is KoinWorks which continues to add to the ranks of institutional lenders for MSME lending on its platform. In addition, there is also an Investree who recently received additional debt funding.

Modalku provides digital funding services, where borrowers (potential MSMEs) can get unsecured business capital loans of up to IDR 2 billion funded by platform lenders (individuals or institutions seeking funding) through the digital market.

Apart from Indonesia, Modalku has also operated in Singapore, Malaysia, and Thailand under the name Funding Societies. To date, the Modalku Group has succeeded in disbursing business loans of Rp 26.47 trillion to more than 4.8 million MSME loan transactions.