Funding Societies (also known as Modalku in Indonesia), a Singapore-based small and medium enterprises (SME) digital financing platform, on Tuesday officially announced its investment into Bank Index (PT. Bank Index Selindo), an Indonesian national Bank, alongside Carro, a Singapore-based automotive marketplace platform.

The move serves as a significant milestone in Funding Societies’ entry into the neobanking space and its drive to offer more high-impact digital financial services to underserved businesses in the region, Funding Societies said in a statement.

With a focus on SME Banking, Bank Index is a privately-owned national bank with a strong nation-wide footprint of 53 offices networks in major commercial areas across Jabodetabek, Java, Sumatra, Bali and Batam. The bank also conducts business across a range of commercial supply chains while offering mobile and internet banking services to its clients.

“Our investment and partnership with Bank Index will support Funding Societies’ business strategy into neobanking. Bank Index shares the vision of empowering and developing SMEs. Since 2015, Funding Societies has been actively partnering with banks across the region, and our partnership with Bank Index will take FinTech-bank collaboration to the next level,

“Our complementary capabilities will enable us to serve SMEs better across banking, payments, lending and digital services to uplift Southeast Asia’s economies through small businesses,” said Funding Societies | Modalku Co-Founder and Group Chief Executive Officer Kelvin Teo.

Funding Societies provides digital financing services, where developing micro, small and medium enterprises (MSMEs) can apply for up to S2 million ($1.46 million) in working capital financing funded by institutional and retail investors through a digital market.

In addition to Singapore and Indonesia, Funding Societies also operates in Malaysia, Thailand, and Vietnam. The company has facilitated more than S3
billion ($2.19 billion) in working capital through more than 5 million MSME loan transactions.

According to the statement, Funding Societies’ investment into Bank Index is one of its key steps to further progress the FinTech industry. The Indonesia FinTech Association (AFTECH) Annual Members Survey held in 2021 revealed that the neobank cluster has the potential to rapidly grow in the future, especially for the unbanked population, with an estimated growth of 51 percent in Indonesia.

This is further backed by Ernst & Young’s 2021 NextWave Global Consumer Banking Survey, which highlighted the highest rates of neobanking activities’ adoption amongst consumers in two regional markets, one of which being the Asia Pacific market.

“Bank Index’s plan for a sophisticated fintech industry, with a human touch at its core, aligns with our own vision of building capabilities and infrastructure that will serve customers across the automotive ecosystem — whether it’s buying, selling, SME financing, insurance or more. As such, co-investment was the natural choice. We strongly believe in the value of this partnership and are excited to be a part of this journey moving forward,” said Jeremy Ong, Chief Executive Officer of CARRO Indonesia.

Founded in 2015, CARRO is Southeast Asia’s largest auto marketplace that offers a full-stack service across the car ownership lifecycle – entirely online. By offering a trustworthy and transparent experience, it transforms the traditional way of buying and selling cars through proprietary pricing algorithms and AI-enabled capabilities. The startup last raised over $500 million from Softbank Vision Fund and several sovereign funds. It has over 2000 employees across Indonesia, Thailand, Malaysia, Vietnam, and Singapore.

“We are delighted to welcome Funding Societies and Carro as shareholders of Bank Index. Together, we will partner to forge strategic initiatives based on our shared vision and mission, primarily to greatly expand our services to our target market. This collective step is also a reference point to continue pursuing comprehensive digital transformation,” said Gimin Sumalim, President Director of Bank Index.

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