Alami aims to help SMEs access syariah financing

• Has served nine SMEs with a total value transaction of US$ 1.34 million
• Developing feature and reaching out to Islamic communities to raise awareness

PT ALAMI Teknologi Sharia (Alami), is Indonesia's first syariah financial technology aggregator startup, that enables small and medium enterprises (SMEs) to easily access financing from various Islamic Financial Institutions (IFIs) in Indonesia. Alami aims to enable SMEs to access financing from IFIs.

Alami chief executive officer and founder Dima Djani (pic) says that Islamic banking started later than conventional banking and even though Indonesia is a country with a Muslim majority, the penetration of Islamic banking is only 6% which makes it less competitive.

“We started this company with a vision to explain the concept of syariah in a more “human” way. And we utilise technology to approach younger generation who want to learn more about Islamic banking.”

Launched in December 2017, to date, Alami has served nine local SMEs with a total of 20 billion rupiah (US$ 1.34 million) in transaction value.

He says that the company focuses on the B2B market because it requires deeper analysis compared to B2C or retail which may only require credit scoring.

“We also look at the SME founders, businesses, credit capabilities, and willingness to explore syariah banking schemes.”

With ticket sizes from 200 million rupiah to 30 billion rupiah (US$13,400 to US$2 million), SMEs are able to search and compare prices from various banks with syariah services such as Bank Mandiri, Bank BNI, and Bank Mega as well as various IFIs and P2P lenders with fully syariah schemes.

“They only need to provide their data, and after completing the process, our partners will contact them with offers. It takes approximately one week to process depending on our partners.”

To reach SMEs, Alami has a sales team with wide networks to markets and business associations. It also applies the banking standard of credit scoring to maintain its quality.

“Although it is a little bit tricky due to the undeveloped market, but once we get there, it will create a “snowball” effect.”

He says that the company has to build trust and awareness to boost growth.

“Indonesians still have the perspective that syariah banking services are not as credible as conventional banking. That is why we hire professional staff with experience in finance and syariah.

“We reach our markets by riding the fintech wave, from within the community, on social media, and through digital advertising.”

The aggregator generates 1% in revenue from every successful transaction. Alami is currently bootstrapping and looking to explore more funding sources.

In terms of challenges, Dima admits that he finds difficulty in increasing financial literacy in syariah, getting funds for the company, talents acquisition, and partnerships.

“To solve this, we have to work on developing our services and products as well as reach out to local Islamic communities.”

Alami now has nine staff on its team including in-house engineers as they use vendors for their technology development.

Dima says that, “On the alternative lending industry, Alami is still relatively new and hopes to see growth in terms of awareness. As a pure syariah-based business, our deal sizes are enough.”

He targets to expand the features on its platform and its operations to other cities within Java, and has mapped out collaborations with Islamic communities to raise awareness.

Sharing economy to boost the industry

Dima sees SMEs in Indonesia as the backbone of economic growth and due to the millennial demographic boom, this sector will boost the growth even more.

“However, purchasing power has to be strong enough, and this will be affected by the world’s economic situation. That is why, in our case, it is the right time for banks and financial institutions to collaborate with tech startups - it is the sharing economy.”

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