Heaptalk, Jakarta – Fairbanc, the U.S’s fintech startup, announced the Firm secures undisclosed funding for its pre-series A round (28/06). The capital injection reported reaching the seventh-figure amount was disbursed by ADB Venture as a venture arm of Asian Development Bank, East Ventures, and Accion Venture Lab. Moreover, Sampoerna Strategic, the Group that houses Fairbanc’s angel investor in its previous investment, also participated in this round. This new support comes on the heel of the last investment from 500 startups and Michael Sampoerna, an Indonesian billionaire who sits as the President Director of Sampoerna Group in April last year.
Fairbanc earmarks the fresh fund to ramp up credit access for Indonesia’s small retailers, especially unbanked and underbanked people. The Company selected the country based on the consideration of its tremendous financing potential proven by the rate of underbanked people that is the highest in South East Asia. The estimation released by the World Bank also supports Fairbanc’s decision where the research found the total credit needed by Indonesia’s micro, small, and medium enterprises (MSMEs) to boost the country’s economy was at the number of US$166 billion.
In addition to promoting credit access, Fairbanc also plans to enlarge cooperation with its distributors while spurs its sales and technology teams. Since 2019, the Entity has cooperated with several major FMCG firms such as Unilever, L’Oréal, and Danone. By the partnership, the Firm has allowed groceries to obtain and sell the FMCG without worrying about selling strategy and capital. Fairblanc’s business model namely closed-loop financing has provided MSMEs with interest-free loans in the form of goods so as the merchants do not bear the brunt to pay the installment. Although having zero income from loan interest, still, the Entity bags earning from the price gap offered by the suppliers.
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“Fairbanc is empowering and future-proofing the many unbanked grocers who distribute Unilever products, a large percentage of whom are female,” Francisca Ho, Head of Customer Development Finance at Unilever Indonesia added, “Fairbanc’s mission of financial inclusion is aligned with Unilever’s purpose to enhance the livelihoods of millions of people as we grow our business”.
Further, the Firm collaboration with the major FMCG firms whose products are consumed by most people also is perceived as a great tactic to decline the risk of default. A revolving credit line which limit is updated every week can be utilized to buy the distributor’s commodity at a good price. As the target is retailers who may not have a phone with advanced specifications, to reach unbanked and underbanked people, Fairbanc sends verification codes via SMS. The vast benefit and convenient customer experience offered made the public flock to use the platform. Since last year, nearly 60,000 MSMEs have incorporated to Fairblanc’s network and over 35% of them have demonstrated growth.
Fairbanc Founder and CEO Mir Haque stated “What makes Fairbanc so unique compared to other fintechs is that it plugs into large consumer brands like Unilever’s vast merchant networks to offer ‘Buy Now Pay Later’ credit to tens of thousands of retailers without requiring any loan applications or smartphones. System integration into consumer brands’ distribution app allows Fairbanc to access merchants’ order and payment history, which in turn, allows Fairbanc to utilize advanced data science and machine learning to underwrite credit and grow merchant’s sales while keeping loan defaults and operating costs very low.”