Modalku partners with Tokopedia to provide financing facility to offline partners

Softbank-backed online marketplace Tokopedia and Indonesia’s fintech lending firm Modalku have launched a new feature named Tempo. Tempo provides financing with fast activation and flexible usage for Mitra Tokopedia, the offline partners who run small kiosks and who are registered with Tokopedia.

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The partners can make purchases of goods through an online wholesale feature with a payment limit. According to Modalku, the feature has been used by thousands of Tokopedia partners in several cities in Indonesia including Java, Medan, Palembang, and Pekanbaru. It further said that Mitra Tokopedia experienced a fivefold increase in turnover per month on average after activating the Tempo feature in their applications.

As of October 2019, there are around 350,000 active Mitra agents for the platform. Tokopedia’s assistant vice president of new retail Adi Putra said that the company’s 30 digital products will gradually be made available to Mitra Tokopedia partners, thus encouraging traditional retail players to contribute more to Indonesia’s digital economy.

The limit provided on the Tempo feature is adjustable, depending on the needs of the partners, ranging from 250,000 rupiah to 5 million rupiah (US$17.85 to US$357) per transaction. The partners can make payments using the Tempo feature for a period of up to 10 days. Repayments are done directly using the partner balance feature contained in the Tokopedia Partner application.

“We continue to strive to reach more MSME segments in Indonesia. Stalls are one type of business that we encounter very much, but many have difficulty accessing funding due to locations that are difficult to reach and lack of education about the benefits of technology in getting venture capital. Our collaboration with Tokopedia is in line with Modalku’s mission to increase financial inclusion including stall traders who have the potential to develop,” Reynold Wijaya, co-founder and CEO of Modalku, said in a press statement.

This is not the first collaboration between Tokopedia and Modalku. In July, Tokopedia and Modalku announced a partnership to provide online merchants in the country access to Modal Toko, a platform which offers them loan products to grow both their business and revenue.

Modal Toko received a lending license from Indonesia’s Financial Services Authority (OJK). This has allowed merchants to get a capital loan of up to 300 million rupiah (US$21,400) that can be withdrawn anytime following an easy application process.

The loan approval process takes one day and merchants can get a loan with flat to low interest rates without administration fees, according to an official statement.

By allowing merchants quick access to funds, for inventory purchases for example, the facility by Modal Toko is expected to help merchants increase revenues because they can widen the product range they sell to customers.

This report was first published on KrAsia.