Jakarta. One of Indonesia's leading peer-to-peer fintech lending companies KoinWorks is offering leniency for borrowers amid the Covid-19 pandemic.
KoinWorks has issued a new installment policy which includes relaxation of the payments. Borrowers wanting to apply for the relaxation must prove first that their business has been affected by Covid-19.
"We will monitor the borrowers' ability to pay back their lenders. If they're struggling, we will adjust their payment schedule, or put them on hold. We want to make sure that their business keeps running," KoinWorks Chief Marketing Officer Jonathan Bryan said on Wednesday.
Some borrowers have already applied for the relaxation, but not all earned approvals, Jonathan said.
Borrowers need to provide proof that their business has been impacted by the pandemic, such as financial statements or physical evidence.
So far, fewer than 3 percent of borrowers have applied for the payment relaxation.
"Most of our clients can withstand the impact because they're digital-based. They can focus on online delivery or adjust their practice according to what their customers want," Jonathan said.
"Food businesses, for example, have started offering frozen food. Fashion companies are making personal protective equipment and face masks. As long as their business remains adjustable, they can find ways to absorb the pandemic's impact," he said.
According to him, the most impacted sectors during the coronavirus crisis have been crowdsourcing, tourism and hospitality.
"Crowdsourcing businesses that require face-to-face meetings have been hit especially hard," he said.
KoinWorks now regularly check on their borrowers to see if can still keep their business running.
"We understand some borrowers are struggling to pay back their lenders. We have a responsibility to assist them," Jonathan said.
KoinWorks' Protection Fund ensures capital repayment of up to 100 percent if the borrower fails to pay back the lender.
Momentum for Businesses
Jonathan said businesses could use the pandemic as a stepping stone to reap growth or build a stronger brand by using technology.
"The so-called 'new normal' can be an opportunity for small-medium businesses to use more digital technology to grow their business, including by making use of P2P fintech lending platforms as an alternative to bank loans," he said.
"Businesses need to be more creative in promoting and distributing their products online," Jonathan said.
The company said it has seen bigger demand for loans as SME owners stock up for Idul Fitri.
On May 18, KoinWorks secured a $10 million funding from UK-based emerging market debt provider Lendable.
During the first quarter of 2020, KoinWorks distributed a total of Rp 307 billion ($20.9 million) in loans.
Since it was founded in 2016 until March 2020, KoinWorks has channeled a total of Rp 2.1 trillion in loans.
The company has already served 6,196 individual borrowers and 561 institutional borrowers, with a 90-day loan repayment success rate of 95.77 percent.
Until March 2020, outstanding loans on the platform had reached Rp 406.9 billion.