Indonesia's Bank BRI teams up with Investree to offer loans to entrepreneurs

INDONESIA's Bank BRI will offer two trillion rupiah (S$194.1 million) of working capital loans through peer-to-peer lending platform Investree, a large portion of which will be allocated for entrepreneurs in the creative sector.

The loans will be offered via invoice financing, where the borrower's accounts receivable form the basis of each loan. Investree will conduct a credit scoring analysis for each loan application before getting approval from Bank BRI to release the funds.

Indonesia's Chamber of Commerce and Industry estimates that the local creative sector - which includes handicrafts, design, fashion, architecture, culinary arts and advertising - contributed significantly to the national economy in 2019, said Bank BRI in a press statement.

But creative businesses typically do not have physical assets such as land or machinery to put up as collateral for a bank loan, it added. This represents an untapped opportunity for the sector's growth.

"We know there is a gap between banks and several business sectors in Indonesia. We need to work with fintech companies so that we can reach more people, especially MSMEs (micro, small and medium enterprises) in the creative sector," said Bank BRI's director of digital technology and operations Indra Utoyo.

To date, Bank BRI has disbursed more than 200 billion rupiah in loans on Investree. Using its proprietary artificial intelligence and alternative credit checking methods, it has been able to achieve a zero per cent non-performing loan rate thus far.

Bank BRI analyses funding risks based on data provided by Investree displayed on each potential loan case.