KOMUNAL, an Indonesian fintech firm focused on driving financial inclusion through the digitalization of rural banks (BPR), has closed the year 2023 by raising $5.5 million in a Series A+ funding round led by Sumitomo Corporation Equity Asia.

The funding round also saw participation from notable venture capital firms including Jafco Asia, Skystar Capital, Sovereign Capital, and Gobi Partners, KOMUNAL said in a statement on Monday.

With the Series A+ funding, KOMUNAL remains committed to its mission in driving financial inclusion in Indonesia through the digitalization of rural banks, which have hyperlocal touch points with their respective local populace.

The company will also continue to expand its product offerings and develop close partnerships with more rural banks, particularly those outside Java and Bali.

The firm also said it has achieved strong operational performance and growth, while successfully maintaining operational profitability in the second half of 2023.

In 2023, KOMUNAL successfully channeled a total of $600 million in combined loans and deposits, nearly triple of what it was in the previous year.

Through KomunalP2P, the company has disbursed $250 million in loans to over 1,300 micro, small and medium enterprises (MSME) projects throughout Indonesia.

Additionally, DepositoBPR by Komunal has also channeled $350 million in deposit funds to 376 rural banks across the nation.

“We are grateful for these achievements, and hope that they also reflect the benefits experienced first-hand by many individuals and small businesses,” said Hendry Lieviant, Co-Founder and Chief Executive Officer of KOMUNAL.

“This is a collective accomplishment by all of KOMUNAL’s treasured stakeholders,

“Without the backing of our investors, rural bank partners, regulators, and the entire KOMUNAL team, these milestones would not be possible,” he added.

He also said he firmly believes that rural bank digitization is pivotal to nurture financial inclusivity in Indonesia.

“We will continue to innovate and bring meaningful impacts to Indonesia’s massive population base, especially the underserved yet promising MSMEs in tier 2 and 3 cities,” he said.

KOMUNAL is a fintech company whose mission is to accelerate financial inclusion through digitizing rural banks by combining funding access and hyperlocal lending to support economic growth in Indonesia.

Komunal provides financial services to the underbanked population through its unique partnership with the rural banks in Indonesia.

Partnering with 376 rural banks across Indonesia, KOMUNAL channels productive loans to MSMEs predominantly based in Indonesia’s tier 2 and 3 cities.

Through its digital-based DepositoBPR by Komunal offering, Indonesians can now seamlessly deposit funds in hundreds of rural banks, eliminating the conventional need for face-to-face processes.

These deposits also offer higher interest rates than deposits offered by commercial banks, while still being guaranteed by Indonesia Deposit Insurance Corporation (LPS) – the country’s public fund guarantor.

KOMUNAL opined that there is huge growth potential, as the general urban population remains widely unfamiliar with rural bank’s deposit product despite its compelling attractiveness, most likely due to their primary presence in tier 2 and 3 cities.

“KOMUNAL empowers rural banks with a one-stop banking-as-a-Service (BaaS) platform which will be instrumental in expanding the availability of credit to small and medium-sized enterprises (SMEs), and ultimately unlocking the economic potential of Indonesia’s rural areas,” said Alan Tang, representative of Sumitomo Corporation Equity Asia.

Indonesia’s Komunal raises $8.5M funding led by East Ventures