A fair solution

• Unbanked entrepreneurs and MSMEs (micro, small, and medium enterprises) are often stuck in a vicious cycle – not enough capital to grow, not enough growth to access formal financial services.
• 500-backed fintech company Fairbanc was launched to address this issue, and they secured US$13.3M in debt financing from Indonesian state-backed Pegadaian’s digital lending arm, which operates under Bank Rakyat Indonesia.
• The fresh funds will be used to expand their operations with off-balance sheet financing through their new Buy Now, Pay Later (BNPL) gateway. The team also plans to make a bigger push into Indonesia.
• Founder Mir Haque said Indonesia offers the right backdrop for the company to bring about a scalable solution that can be replicated in many other emerging countries. His team is also exploring expansion opportunities into Vietnam and the Philippines in partnership with Unilever.
• Fairbanc’s solution enables MSMEs to purchase inventory on BNPL credit in partnership with large consumer brands. The team has already onboarded over 550,000 merchants on their platform.
• Users do not require collateral, credit history, smartphone ownership, or digital literacy. Instead, Fairbanc taps into the supply chain data of FMCG (fast-moving consumer goods) distributors to automate credit scoring and risk monitoring to provide companies with working capital.
• The company’s survey showed that 80% of their beneficiaries are unbanked, and around 70% are women merchants who were able to increase their sales by an average of 35%.
• Congratulations to the Fairbanc team!
• Read the full story on DealStreetAsia.