Indonesia’s Pintek raises funds to reach students, schools hit by Covid-19

Pintek, an Indonesian fintech company that provides credit to both students and educational institutions, announced that it has secured funding from Accion Venture Lab, the seed-stage fintech investment initiative of Accion.

The startup didn’t disclose the funding amount, but said that the investment was part of its pre-series A round. Last year, it said it received pre-series A funding led by Rocket Internet-backed Global Founders Capital.

The company plans to use the latest investment to expand its technology and platform to meet the needs of underserved students and schools affected by the Covid-19 pandemic, according to a statement.

The Pintek team / Photo credit: Pintek

In Indonesia, most students and schools have limited access to financing, Pintek said. Private schools, which make up more than half of the country’s total secondary institutions and 90% of its colleges and universities, often lack the ability to provide adequate collateral in order to access long-term loans to improve their facilities and hire staff.

Meanwhile, whereas the average Indonesian family of four makes about US$222 per month, tertiary education averages from US$1,000 to US$5,000 per year, according to a report.

Pintek underwrites student loans and splits payments into smaller amounts that can be paid in more frequent installments to make tuition more affordable. According to the company, more than half of its student loans are provided to first-time borrowers with no credit history. It charges an interest fee of 0% to 1.5% per month, said Pintek’s co-founder Ioann Fainsilber in an interview.

The startup offers loans to schools against their anticipated tuition revenue.

Founded in 2018, the company said it has reached students in 26 of the nation’s 34 provinces through partnerships with payment processors and schools.

In this time of pandemic, the company said it has worked with edtech platforms to provide schools with financing and access to remote learning tools to help them transition to online learning.

It is also working with the Indonesian Teachers’ Association to launch a fundraising campaign to help unemployed teachers. According to Pintek, nearly half of the teachers in West Java have lost their jobs due to indefinite school closures.