Indonesian fintech startup ALAMI has identified a key gap in the market and is now aiming to fill it. The peer-to-peer (P2P) lender has released more than USD7.5 million in financing to SMEs in Islamic countries and is currently looking at raising fresh capital.
ALAMI has worked closely with the National Sharia Board to create business models and operations that are aligned with sharia principles. Additionally, the fintech startup is licensed and regulated by the Otoritas Jasa Keuangan (OJK), Indonesia’s financial services authority.
The technology used in the ALAMI platform allows it to analyze data that yields high-quality financing with excellent credibility. Established in 2017, the firm started life as an aggregator for Islamic finance before realizing SMEs in Indonesia needed greater access to funding.
And as the largest Islamic country in the world, it was important for the solution to be sharia compliant. This saw the company shift away from aggregation into the P2P lending space.
“Islamic financing is gaining strength due to a behavioral shift among young Muslims, who want to adopt an Islamic lifestyle. For expansion, we are still going to be very much focused on the Indonesian market, given the country has the largest Muslim population in the world,” ALAMI CEO Dima Djani explained to Nikkei Asia.
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ALAMI scales up with bank purchase and looks for more funding
In March, ALAMI acquired BPRS Cempaka Al-Amin, a Sharia rural bank, in a deal that was valued at less than USD10 million. Additionally, the fintech startup is in talks to raise a Series A+ round as it looks to meet compliance requirements set forth by the OJK.
The company completed Series A1 equity-cum-debt funding in January which saw it secure USD20 million. That was in addition to raising more than USD4.5 million in seed funding during 2020. ALAMI investors include Quona Capital, Golden Gate Ventures and AC Ventures.
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Interesting Analysis
I’ve actually checked out the ALAMI platform and it is really good. The platform is open to both Indonesian citizens and foreigners, although the latter group needs a local bank account to be eligible. Like most P2P lending sites, ALAMI does a good job of screening SMEs to minimize risk but there will always be some.
More importantly, there aren’t many sharia-compliant fintech solutions in Indonesia. The firm is filling a key gap in the market for the country’s growing young and internet savvy population. You can find out more about ALAMI here.
