Credit Saison accelerates JULO’s ambition to re-envision traditional cash loans in Indonesia with US$80 mil investment

• Funding includes US$30 mil in equity & US$50 mil debt funded by Credit Saison
• Funds will be used to advance analytics, product development and marketing 

Julo’s digital lending business will be supercharged with fresh support and US$80 million (RM340.3 million) in funding from Credit Saison to improve credit access for Indonesia’s underserved by traditional lenders and buy now pay later (BNPL) platforms.

In a recent statement, Julo said this funding includes a mix of US$30 million (RM127.6 million)  equity and US$50 million debt fully funded by Credit Saison. Investors from its previous rounds include Skystar Capital, Saratoga Investama, East Ventures, Quona Capital, Central Capital Ventura, MDI Ventures and Gobi Partners, among others. 

[RM1 = US$0.235]

Kosuke Mori, senior managing executive officer and head of Global Business at Credit Saison Co Ltd said credit innovation requires a deep understanding of local consumer behaviors and needs in order to truly improve the financial health of all. 

“Julo has emerged from the past few years as a resilient and Covid-proven business with more than US$300 million disbursements under its belt to date,” he added.

“We look forward to joining hands with them in this next phase of growth to accelerate financial products that will drive truly meaningful change for individuals in Southeast Asia,” Mori said. 

The investment from Credit Saison is part of the company’s continuous efforts to introduce its financial services foundation to high-growth fintechs outside of Japan via a combination of capital and close operational partnerships. 

The investments mark the organisation’s next steps to accelerate its expansion into the high-growth and promising Indonesian market, Julo said. 

This investment strategy builds on Credit Saison’s existing activities in emerging markets via Saison Capital, the corporate venture capital arm with a focus on discovering startups with an opportunity to build embedded finance capabilities.

According to Adrianus Hitijahubessy, chief executive officer & co-founder of Julo, the company is already being used by Indonesians throughout their financial lives, with 72% of loans used for improvement purposes such as business capital, home renovation and education. 

“By joining hands with Credit Saison, we have a fresh opportunity to take this significantly further by re-envisioning what the future of traditional lending should look like to truly uplift the region’s most underserved,” he added. 

Amidst the consolidation of peer-to-peer lenders in Indonesia, Julo has outperformed expectations, having managed a positive yield in its portfolio during the height of Covid-19 in 2020. In 2021, the total number of funds disbursed grew by more than three times as compared to the year prior and is currently on track to increase its loan book by more than five times in the next 12 months.

The fintech company is one of Indonesia’s virtual credit card pioneers. It was one of the first to offer nationwide digital data-driven credit underwriting and risk assessment platforms to process consumer credit applications and determine their creditworthiness through a mobile app. 

In 2021, Julo launched a digital credit card, which saw 97% users utilising non-cash features to top-up e-wallets, top up phone credits, pay utility bills, and process payments on e-commerce sites.

This investment round was structured to scale the company’s growth with a two-pronged approach. US$30 million equity will be used to advance Julo’s analytics, for product development, marketing, and customer acquisition plans by hiring additional talent across their developer, data scientist and business intelligence teams. US$50 million debt will be used to fuel finance loans on the platform.

Being the only corporate investor on Julo’s cap table with a global lending business, Credit Saison will play an active role in its hyper-growth phase and provide governance direction as the company scales. Both companies will also explore preliminary opportunities to expand into other emerging markets together.

Currently the options for underbanked Indonesians to access credit lines include microfinance institutions or BNPL facilities. Both are limiting as they require transaction-by-transaction approvals and have narrow use cases. 

A key reason for this is because loans assessed by traditional credit scoring models typically disadvantage individuals without certain data points - like good credit history - so they are determined as high-risk loans.

Unlike other platforms, Julo said it can facilitate an ongoing credit line after a simple one-time assessment on its app. It does this by applying machine learning throughout a loan cycle and is advanced enough to assess risk based on more than 5,000 data points for identity checks, affordability assessment, creditworthiness, and fraud detection, all in less than three seconds. 

Today, more than 500,000 Indonesians use JULO actively in their daily lives to fund withdrawals, phone credit top-ups, fund transfer, utility bill payments, e-wallet top-ups and e-commerce payments.

The team at Julo has prioritised responsible lending and collections - they were among the first fintech lending platforms which received a full licence from Indonesia’s Financial Services Authority (OJK). 

The company also emphasises data security and holds an ISO27001 certification, an international information security standard regulated by International Organization for Standardization and proves that it has implemented best practices for information security processes to keep the management system secure from cyber attack risks.