KoinWorks, a lending startup focused on small and medium-sized businesses in Indonesia, has raised US$20 million from investors, e27 reported this week. It comes five months after it pocketed nearly US$14 million in series B funding.

The app connects ordinary people willing to lend money, in return for interest, to businesses across Indonesia. Recently it expanded to offer student loans.

KoinWorks’ latest stats:

  • Started in 2015 in Jakarta, Indonesia
  • 2,900 active borrowers
  • 220,000 total lenders
  • Total US$62 million raised from investors
  • Newest round is a mix of equity and debt funding, led by Quona Capital with existing investors Triodos Bank, EV Growth, and Saison Capital contributing
  • Largest direct rival is Investree, started in Indonesia in 2015, which has expanded across Southeast Asia

Shaky market

Right now is a dangerous time for lending companies as the worldwide Covid pandemic has forced the suspension of many small businesses, leaving some firms on the brink of bankruptcy. And that’s on top of well-documented woes for digital lenders around the world, struggling with low rates of loan recovery. Just last month, SoftBank-backed Kabbage, which is very similar to Koinworks in that it lends to small enterprises, put hundreds of US staff on unpaid leave.

While Indonesia has not been as badly hit by Covid–19 as some nations, it has imposed a partial lockdown that affects the capital and certain other cities.

Before the new virus hit, analysts anticipated the global digital lending market would grow from 2018’s US$4.8 billion to US$20 billion by 2026 as people increasingly turn to fintech apps rather than banks.