How regulatory compliance became key to UangTeman’s sustainability

Established in 2014, lending platform UangTeman is one of the pioneers in Indonesia’s online lending space. The startup was founded by Singaporean Aidil Zulkifli, a former lawyer who has a passion for the tech and financial industries.

UangTeman founder and CEO Aidil Zulkifli / Photo credit: UangTeman

“Back when I was still working in Singapore, my secretary got in trouble with a bad lender. I thought that there must be a better way to get a loan, and that’s how I got an idea to build an online lending platform,” Aidil Zulkifli, founder and CEO of UangTeman, told KrAsia in an interview.

Zulkifli believed that Indonesia is the best place to do consumer business due to its market size, so he decided to set up a business in Jakarta. UangTeman started operating when online lending was an unfamiliar concept in the market, so things were far from smooth back then, he said.

“There was no clear regulation and guidance from the government. Many people, including potential partners, thought that we were a scammer, so we made lots of efforts to educate the market and the financial industry itself.”

Fast forward to 2019, the startup has grown into one of the biggest online lenders in the country. Zulkifli said that UangTeman is growing 300% every year, and it now aims to double its growth after closing its first series B round recently.

Focus on regulatory compliance

As a former lawyer, Zulkifli understands the importance of complying with regulations in order to build a sustainable business. UangTeman is one of the few digital lenders that has received a permanent license from Otoritas Jasa Keuangan (OJK), Indonesia’s financial authority, reflecting UangTeman’s commitment to running a socially responsible business, Zulkifli said.

According to him, the permanent license means that the company’s business model, risk management, and tech capacity have been validated by OJK. It opens more business opportunities for the company to work on the next phase of development.

“The DNA of this company is resilience. We see many new startups are growing very fast, but they failed just after the business took off because they couldn’t further scale their business or they have problems with regulations. During five years of operations, we have faced many crises and one of the factors that drive us forward is we always comply with the rules,” he said.

With the new license on its hand, UangTeman plans to add partnerships and deeper integration with banks and other financial institutions, as well as diversify products and services by acquiring another peer-to-peer lending platform. “The deal is expected to close by the end of this month,” he said.

Although Zulkifli couldn’t share more details about the company he’s acquiring, he said that UangTeman is keen to tap into the productive micro business loan space in addition to its core consumer lending business.

As a longtime player and an executive board member of the Indonesian joint funding fintech association (AFPI), Zulkifli says the Indonesian fintech industry still has a number of hurdles to overcome, especially when it comes to eradicating illegal lenders.

The public still has trouble differentiating legal and illegal fintech services, so OJK is currently coordinating with AFPI, the IT ministry, and Google Indonesia to combat illegal lenders, he said. And according to OJK, there were 123 illegal fintech lending platforms operating in Indonesia in August 2019.

Another issue is the prevention of consumers taking too many loans from multiple platforms. “There are some cases where consumers get loans from 50 platforms, it is something that we, as an industry, need to improve.”