Credit Saison accelerates JULO’s ambition to rethink traditional cash lending in Indonesia with strategic investment of US$80 million

  • Funding includes $30 million in equity and $50 million in debt funded by Credit Saison
  • Funds will be used to advance analytics, product development and marketing

Julo’s digital lending business will be bolstered by new US$80m (RM340.3m) support and funding from Credit Saison to improve access to credit for underserved Indonesian traditional lenders and buy now pay later (BNPL).

In a recent statement, Julo said that this funding comprises a mix of US$30 million (RM127.6 million) of equity and US$50 million of debt fully funded by Credit Saison. Investors in its previous rounds include Skystar Capital, Saratoga Investama, East Ventures, Quona Capital, Central Capital Ventura, MDI Ventures and Gobi Partners, among others.

[RM1 = US$0.235]

Kosuke Mori, Managing Director and Head of Global Business at Credit Saison Co Ltd, said credit innovation requires a deep understanding of local consumer behaviors and needs to truly improve everyone’s financial health.

“Julo has emerged in recent years as a resilient and Covid-tested company with over $300 million in disbursements to date,” he added.

“We look forward to partnering with them in this next phase of growth to accelerate financial products that will drive truly meaningful change for individuals in Southeast Asia,” Mori said.

Credit Saison’s investment is part of the company’s ongoing efforts to introduce its financial services foundation to high-growth fintechs outside of Japan through a combination of capital and close operational partnerships.

These investments mark the organization’s next steps to accelerate its expansion into the promising and high-growth Indonesian market, Julo said.

This investment strategy leverages Credit Saison’s existing business in emerging markets through Saison Capital, the corporate venture capital arm focused on finding startups with the potential to develop integrated financing capabilities.

According to Adrianus Hitijahubessy, CEO and co-founder of Julo, the company is already used by Indonesians throughout their financial life, with 72% of loans used for improvement purposes such as business capital, renovation home and education.

“By partnering with Credit Saison, we have a new opportunity to go even further in reimagining what the future of traditional lending should look like to truly uplift the region’s most underserved,he added.

Amid the consolidation of peer-to-peer lenders in Indonesia, Julo exceeded expectations, having managed a positive return in its portfolio at the height of Covid-19 in 2020. In 2021, the total number of funds disbursed increased by more than three times compared to the previous year and is currently on track to increase its loan portfolio by more than five times over the next 12 months.

The fintech company is one of the pioneers of virtual credit card in Indonesia. It pioneered national digital data-driven credit underwriting and risk assessment platforms to process consumer credit applications and determine creditworthiness through a mobile app.

In 2021, Julo launched a digital credit card, which saw 97% of users use features other than cash to top up e-wallets, top up phone credit, pay utility bills and process payments on websites. of e-commerce.

This investment round has been structured to scale the growth of the business with a two-pronged approach. A capital of US$30 million will be used to advance Julo’s analytics, product development, marketing and customer acquisition plans by hiring additional talent within their teams of developers, data and business intelligence. Debt of US$50 million will be used to fund loans on the platform.

As the only corporate investor on Julo’s capitalization table with global lending activity, Credit Saison will play an active role in its hyper-growth phase and provide governance guidance as the company evolves. The two companies will also explore preliminary opportunities to expand into other emerging markets together.

Currently, options for underbanked Indonesians to access lines of credit include microfinance institutions or BNPL facilities. Both are limiting as they require transaction-by-transaction approvals and have narrow use cases.

One of the main reasons for this is that loans rated by traditional credit scoring models generally disadvantage people without certain data points – like a good credit history – so they are considered high-risk loans.

Unlike other platforms, Julo said it can facilitate an ongoing line of credit after a simple one-time review on its app. It does this by applying machine learning throughout a loan cycle and is advanced enough to assess risk based on over 5,000 data points for identity checks, credit affordability, creditworthiness and fraud detection, all in less than three seconds.

Today, more than 500,000 Indonesians actively use JULO in their daily lives to fund withdrawals, phone credit top-ups, fund transfers, utility bill payments, e-wallet top-ups and commerce payments. electronic.

Julo’s team prioritized responsible lending and collections – they were among the first fintech lending platforms to receive a full license from the Indonesian Financial Services Authority (OJK).

The company also emphasizes data security and holds an ISO27001 certification, an international information security standard regulated by the International Organization for Standardization and proves that it has implemented the best practices for the processes. information security to protect the management system against the risk of cyber attack.