Wedlite lets Indonesian couples finance their weddings through monthly plans

In Indonesia, weddings are a major and costly life event that some people can barely afford. This is what led Abraham Viktor to found Wedlite, a startup that offers loans to couples who prefer to pay for their wedding expenses on a month-by-month basis.

“I’m of marriage age, and I was asking myself – If I wanted to get married now, how would I finance it? Jakarta is not cheap. Some people burn all their life savings to throw a three-day wedding party,” Viktor says.

He did some research and found that if he wanted to take a bank loan, there would be an interest rate of two to three percent per month. “There has to be a better way,” he thought.

With Wedlite, he devised a way to reduce the interest rate to one to two percent, while giving couples a loan period of two to three years to pay it back in monthly rates. How was this possible?

Schooled in investment banking

Viktor was an investment banking analyst, first with Boston Consulting and later at Nomura investment banking, before starting Wedlite. This experience gave him the necessary insights into the financing world, and he made valuable contacts – among them former colleague Abednego Pramudito, who became his co-founder at Wedlite.

Wedlite’s loans are issued by financial institutions other than banks, also known as multi-financers. According to Viktor, multi-financers are commonly used in Indonesia to get loans for cars or motorcycles. In contrast to banks, multi-financers take collateral – a form of security – from the person receiving the loan, for the duration of the loan period, but have lower interest rates.

“At Wedlite, we work together with multi-finance institutions. We re-package their product and sell it to our customers. This way, we can offer better customer service while being cheaper than a bank loan,” Viktor explains.

Multi-financers don’t traditionally branch out into loans for anything other than vehicles, according to Viktor. That’s why they were eager to try the concept by partnering with Wedlite. The startup currnetly partners with Batavia Prosperindo and BFI.

How it works

In the case of Wedlite’s wedding loans, the collateral at stake is usually a motorcycle or car.

Loan applicants fill out a form on Wedlite’s website, with biodata, legal documents, bank statements and salary statements. This information is passed on to Wedlite’s multi-finance partners.

The couple receives a response within 24 hours, then they make an appointment to meet in person. The multi-finance partner sends an agent to inspect the condition of the collateral, and, if the loan is approved, takes the certificate of ownership as security. The vehicle itself stays with the owners and can remain in use. The loan couples receive can be up to 85 percent of the value of the collateral.

Once the loan is approved, it is not transferred to the couple’s account. Rather, the funds are dispersed directly to the wedding vendors appointed by the couple – these can be venues, catering services, or decoration services.