Benefits of P2P Lending Fintech for SMEs – The majority of MSME actors do not yet have a PT / CV legal entity in running their business. This is often an obstacle when applying for loans from conventional financial institutions. Research conducted by Modalku and consultants and research institute DSInnovate revealed that as many as 82% of respondents did not yet have a PT / CV in running their business.

Modalku and DSInnovate’s research aims to gain an understanding and perspective on how Modalku’s P2P lending services contribute to the MSME sector, especially on the economic and social side.

Another finding is that almost 50% of micro businesses view that business licensing is an obstacle, while more than 50% of micro businesses view financial reports as restrictive. Of the total respondents, only 27% of MSMEs have applied for loans from conventional financial institutions.

Furthermore, research through online surveys and telephone discussions of 350 MSME players, Modalku customers, also found that MSME business players can manage cash flow more smoothly, increase business production, and maintain the smooth running of daily business operations through funding from Modalku.

Iwan Kurniawan, Co-Founder & COO of Modalku, said that during the 5 years Modalku has been present in Indonesia, there have been many developments, both in terms of the fintech sector , and the MSMEs itself.

“Through breakthroughs and technology-based approaches, as well as creditworthiness assessments that are in accordance with the characteristics of MSMEs, the fintech sector, especially P2P lending, has an important role in supporting MSME players who have not been touched by access to funding from conventional financial institutions,” said Iwan.

The research was conducted on MSMEs engaged in various sectors, such as retail trade (29%), the textile, equipment and leather products sector (17%), and food, beverage and tobacco products (17%).

When viewed from the time period of business establishment, 83% of the respondents’ businesses were up to 7 years old. This shows that the MSME sector has the potential to be sustainable for the long term.

Modalku is an alternative financing for business capital needs for respondents. The reasons for the consideration in applying for a loan to Modalku are quite diverse, especially the requirements for applying for loans without collateral (41.7%) and fast disbursement of loan funds (28.86%).

More than 50% of respondents also admitted to using a loan from Modalku to buy raw materials or equipment for their business premises. They are of the opinion that buying raw materials in large quantities is important to support their production.

The increased opportunity for MSMEs to obtain funding from P2P lending , including funding from Modalku, has had a positive impact on the business operations of MSME players. First, in terms of cash flow management, funding can support MSMEs in managing their cash flow for business operational needs and increasing stock of goods (82.6%).

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    Second, in terms of business development, funding can increase the production flow of MSMEs and increase business profits (82.6%). In addition, more than 78% of MSME players agree that not getting a loan from Modalku has had a sufficient impact on the success of their business, such as lower income, hampered business performance, instability in cash flow, and difficulties in operations.

    Modalku provides peer-to-peer (P2P) lending services , where borrowers (potential MSMEs) can get unsecured business capital loans of up to IDR 2 billion funded by platform lenders (individuals or institutions looking for investment alternatives) through the digital market.

    Apart from Indonesia, Modalku also operates in Singapore, Malaysia and Thailand under the name Funding Societies. To date, the Modalku Group has succeeded in disbursing business loans of Rp 22.4 trillion to more than 4 million MSME loan transactions. Until the end of this year, Modalku targets to distribute loans of IDR 30 trillion.

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