The Asian Development Bank’s (ADB) venture arm, ADB Ventures, has approved an investment of up to $2 million in US-based FinTech firm Fairbanc to expand its operations in Indonesia.

ADB Ventures will make an initial investment of up to $500,000 in a non-operating holding company called Fairbanc Pte Ltd in Singapore to expand its operations in Indonesia which will be conducted through its operating Indonesian subsidiary, PT Fairbanc Technologies Indonesia.

The investment will be provided by the ADB Ventures Investment Fund 1 under the ADB Ventures Financing Partnership Facility, ADB said in a disclosure on its website.

The balance of the approved equity amount may be invested in subsequent fundraising rounds that Fairbanc is expected to undertake by June 2024, it added.

ADB Ventures Investment Fund 1 is a multi-donor trust fund that reached a final close at $60 million in September 2020.

Founded in 2018, Fairbanc is a Silicon Valley-based fintech company with primary operations in Indonesia that partners with fast-moving consumer goods (FMCG) distributors to offer digital micro-credit to micro, small, and medium-sized enterprises (MSMEs) for inventory purchases.

Fairbanc’s proprietary data science and machine learning platform leverages supply-chain data of FMCG distributor partners which allows financial institutions to assess credit risk and extend working capital to MSMEs with limited credit history and collaterals, according to the disclosure.

“Increased access to financial services and improved inventory management for MSMEs increase the resilience to adverse shocks, including climate relates shocks, of store owners and their extended family. Fairbanc’s mission to bridge the MSME credit gap in emerging markets aligns with ADB’s operational priorities of achieving greater financial inclusion and building climate and disaster resilience in Asia and the Pacific,” ADB Ventures said in a statement.

The funding development also came after Fairbanc received financial backing from Columbia Business School’s student run impact fund Microlumbia in December last year.

Fairbanc received an undisclosed amount of investment from VC firm 500 Startups and Indonesian billionaire Michael Sampoerna in April last year.

In 2018, Fairbanc underwent an initial test in Bangladesh before linking up with Unilever Indonesia through the Unilever Foundry program. It is a scalable, AI-powered mobile loan and payments platform for emerging market small-medium enterprises (SMEs) that requires no collateral, credit history, smartphone ownership, or digital literacy.

Fairbanc has also signed a partnership with one of Indonesia’s largest conglomerates SinarMas to extend credit to micro-merchants selling Unilever and other FMCG products.

ADB Ventures provides seed, early, and early-growth stage capital to startups with solutions for emerging Asia. It pairs capital with ADB’s deep insights and networks to help build new market leaders and invests for financial returns and impact.

ADB Ventures Investment Fund 1 (Fund 1) is a multi-donor trust fund that reached its final close at $60 million in September 2020. It will invest in early-stage companies with technology-enabled solutions that contribute to multiple Sustainable Development Goals, with a focus on climate and gender impact. Fund 1 has a 17-year fund life for holding periods of up to 10 years to maximize the opportunities for the success of an early-stage company requiring more patient capital, the ADB website showed.