Investree Radhika Jaya, an Indonesian peer-to-peer lending marketplace, will introduce a sharia-compliant lending service by the end of July. (Photo courtesy of Investree)
Investree to Introduce Sharia-Compliant Financing Next Month
BY :TABITA DIELA
JUNE 16, 2017
Jakarta. Investree Radhika Jaya, an Indonesian peer-to-peer lending marketplace, will introduce a sharia-compliant lending service by the end of July, to meet a rising demand for such products, a top executive said on Thursday (15/06).
"We've sent an inquiry to the National Sharia Council and we are been waiting for its response," Investree co-founder and chief executive Adrian Gunadi said.
The National Sharia Council was established by the Indonesian Ulama Council to ensure that banking products, services and operations comply with the principles of Islamic law.
"Customers are waiting in line for the sharia-based loan," Adrian said.
The marketplace is currently running a pilot project with three small and medium enterprises from Jakarta and Surabaya as debtors and unnamed lenders.
The loan will be based on an Islamic scheme called wakalah, which involves a predetermined fee instead of interest.
If a lender lends Rp 100,000 ($7.5), Adrian said, then he already knows that he will get Rp 170,000 of investment in the future.
Adrian is no stranger to sharia-compliant products. He started his career as a management trainee at Citibank, then he managed the Standard Chartered's Islamic finances in Dubai, after which he became the head of Bank Permata's sharia department. Before founding Investree, he also served as managing director at Bank Muamalat.
According to him, Indonesia's Islamic banking is still struggling with limited human resources and bureaucracy. Fintech, therefore, makes it possible to test the market for Islamic banking products in an efficient and relatively cheap way.
Investree has been busy this year after it acquired a license from the Financial Services Authority (OJK).
By now, it has processed Rp 214 billion in loans to 626 borrowers. This year it expects to disburse Rp 400 billion.
Next year, the loan marketplace is planning to enter Vietnam in cooperation with a local partner.