MICROCAPITAL BRIEF: Amartha Raises $28m in Equity from Mandiri, MDI, UOB, WWB for Credit Scoring, E-commerce, Peer-to-peer Lending for Women Microentrepreneurs in Rural Indonesia

Amartha, a firm offering peer-to-peer lending and other services in Indonesia, recently raised USD 28 million in equity from two previous investors in the firm as well as Indonesia-based Metra Digital Innovation (MDI) Ventures and the Women’s World Banking (WWB) Capital Partners II fund of the US-based nonprofit WWB. The previous investors increasing their stakes are Indonesia-based Mandiri Capital and Singapore-based United Overseas Bank (UOB) Venture Management. Amartha plans to use the funding to support women microentrepreneurs in rural areas by: (1) expanding its peer-to-peer lending; (2) providing its borrowers with financial literacy education and entrepreneurship training; (3) building out its new Amartha Plus e-commerce platform, which allows users to access lower-cost goods; and (4) launching Amartha Score, which allows people to build digital credit histories that can give them access to loans.

On Amartha’s plans for expansion, the firm’s Founder and CEO Andi Taufan commented, “We hope to tap at least 20 percent of [microentrepreneurs in Indonesia], serving up to 10 million borrowers from this segment in the next five to ten years.”

Founded in 2010, Amartha offers an online platform through which groups of rural women may access enterprise loans ranging from IDR 3 million (USD 200) to IDR 10 million (USD 700), funded by large numbers of individuals and entities via the platform. During 2018, the most recent year for which data are available, Amartha distributed approximately USD 56 million in working capital and recruited 110,000 new customers. As of May 2021, Amartha has distributed a total of USD 240 million in loans to 661,000 rural customers in 18,900 villages in the provinces of Java, Sumatra and Sulawesi. A study conducted by Gadjah Mada University in 2019 found the income of Amartha’s borrowers increased an average of 200 percent to 700 percent after utilizing the company’s services. Amartha reports being cash-flow positive and expects to hit profitability during 2021.

WWB Capital Partners II is an investment fund with a target volume of USD 100 million. Its purpose is to improve women’s financial inclusion by investing in financial service providers that cater to low-income women. Founded in 1979, WWB strives to create economic stability and promote financial inclusion for unbanked women worldwide. As of May 2021, WWB works with 56 institutions in 31 countries. In December 2019, WWB reported USD 38 million in total assets.

Founded in 2014 and headquartered in Jakarta, MDI Ventures is the venture capital arm of government-backed Telkom Indonesia. Its strategy is to combine venture capital with services provided by Telkom Indonesia to accelerate the growth of startups. MDI Venture’s investments focus on digital advertising, payment solutions, cloud computing, big data, communications and e-commerce. As of 2021, MDI Ventures has raised USD 790 million in funding across four rounds, most recently raising USD 500 million through the MDI-Telkom Fund II. Since its inception, MDI Ventures has participated in 54 investment packages and has been the lead investor on 25 of them.

By Sophie Fiala, Research Associate

Sources and Additional Resources

Amartha press release
https://blog.amartha.com/amartha-secures-usd-28-million-new-funding-led-by-womens-world-banking/

Amartha homepage
https://amartha.com/

Amartha Plus webpage
https://amartha.com/id_ID/amarthaplus/

Amartha 2018 Social Accountability Report
https://amartha.com/wp-content/uploads/2019/09/amartha-sar-2018-2.pdf

WWB homepage
https://www.womensworldbanking.org/

WWB financials
https://www.womensworldbanking.org/our-financials/

MDI Ventures homepage
https://mdi.vc/

Crunchbase profile on MDI Ventures
https://www.crunchbase.com/organization/mdi-ventures

Mandiri Capital homepage
https://mandiri-capital.co.id/

UOB Venture Management homepage
https://www.uobvm.com.sg/