Accion Venture Lab, a unit of US-based NGO Accion, recently placed an equity investment in Indonesian financial technology (fintech) firm Pintek. While the size and price of the stake remain confidential, the typical size of an investment by Accion Venture Lab is USD 300,000 to USD 500,000. Pintek lends to private universities, secondary schools and elementary schools using anticipated tuition as collateral. The firm also issues loans to students and their families to pay tuition. More than 50 percent of those taking out tuition loans are first-time borrowers with no credit history.
Accion Venture Lab’s managing director, Vikas Raj, stated, “We’ve been particularly impressed with [Pintek’s] quick response to the pandemic, finding new ways to help customers during this difficult time.” Pintek plans to use the new funding to improve its technology and issue fresh loans to schools working with education technology platforms to increase the availability of distance learning. The firm also launched a fundraising campaign to provide financial assistance to teachers who are unemployed due to the pandemic.
Tertiary education in Indonesia often costs USD 1,000 to 5,000 per year. Pintek charges flat interest rates of up to 1.5 percent per month along with fees of up to IDR 100,000 (USD 7) plus 3 percent of the loan principal. As of 2019, the firm had gross loans of IDR 17.8 billion (USD 1.2 million) outstanding to 216 active borrowers in 26 of Indonesia’s 34 provinces.
Accion created Accion Venture Lab in 2011 to serve as its “seed-stage investment arm.” The mission of the investment vehicle is to support “technology and [other] new approaches that help underserved people and small businesses benefit from the world’s formal economy.” The majority of Accion Venture Lab’s investees are in the microfinance and fintech sectors. As of May 2020, its portfolio consists of 38 enterprises.
Founded in 1961, Accion is a nonprofit that seeks to alleviate poverty by offering services such as microenterprise loans and business training. The organization has 110 partner microfinance institutions (MFIs) providing financial services to entrepreneurs in 50 countries in Africa, the Americas and Asia. As of 2018, Accion reports total assets of USD 345 million.
By Andrew Janni, Research Associate
Sources and Additional Resources
Accion press release on Pintek
https://www.accion.org/accion-venture-lab-invests-in-fintech-platform-pintek-to-improve-access-to-quality-education-in-indonesia
Pintek homepage
https://pintek.id/
Accion financial information
http://content.accion.org/wp-content/uploads/2019/09/ACCION-International-12-31-18-17-FINAL.pdf
Previous MicroCapital post on Accion Venture Lab
https://www.microcapital.org/microcapital-brief-accion-venture-lab-exits-from-maj-invest-buys-equity-in-microfinance-institution-aye-of-india/
Previous MicroCapital post on Accion
https://www.microcapital.org/microcapital-brief-accion-venture-lab-adds-33m-to-fintech-investment-pool/
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