ALAMI is on a journey to popularise sharia-based finance in Indonesia. Here’s how they do it

Anisa Menur
ALAMI is on a journey to popularise sharia-based finance in Indonesia. Here’s how they do it

The ALAMI platform connect sharia-based financial institutions to SMEs looking for funding

Despite being the world’s largest Muslim population, sharia-based financial services have not really taken off in the Indonesian market yet.

Islamic banking assets is only 5.03 per cent of the total banking sector’s assets in the country, with a market share of IDR356.5 trillion (US$26.7 billion).

According to ALAMI CEO Bembi Juniar, this is due to the lack of infrastructure, support from key opinion leaders, and education on the benefits of sharia-based financial services.

“Technology is badly needed to widen the education and infrastructure, so that more people understand and can get easier access to Islamic financing,” he explains in an email to e27.

Enter ALAMI, a Jakarta-based fintech startup aiming to solve these issues for sharia-based financial institutions. In addition to that, the startup also aims to help small- and medium-sized enterprises (SMEs) gain greater access to funding.

So ALAMI offers a platform that serves as an aggregator for sharia-based financing for SMEs.

“The idea itself came as the co-founders are young professionals from banking background. We feel that there are so many functions that can be automated for bankers, so they can easily focus to meet the clients’ needs and do not get caught up in nitty-gritty,” says Juniar.

Also Read: Tamasia is a mobile app for users buy gold to invest in, and it is sharia-based

But what is the difference between what the platform offered, and other services such as P2P lending?

“… We position ourselves as the partner of the Islamic banks, not a competitor. We develop our features and technology to address the bankers’ requirements so that we can collaborate swiftly with the bankers,” he answers.

The startup is also considering to partner with a third-party to provide business counselling support for the SMEs.

Having just been incorporated in January, ALAMI has conducted some pilot projects and claimed to have closed several deals, that is worth the equivalent of US$1 million.

It has also struck partnership with four Islamic financial institutions in Indonesia, and has recently announced a partnership with Southeast Asian fintech startup Kapital Boost.

The deal allows selected SMEs in ALAMI’s network to raise funding from global investors in Kapital Boost’s network.

Working together for the future

Indonesia has begun to see the appearance of some fintech startups which are tapping into the sharia market. In addition to sharia-based online gold marketplace Tamasia, which was launched in October 2017, lending platform Investree has also begun to offer sharia-based products.

ALAMI itself was the runner-up of the INSEAD Venture Competition held in Singapore and Paris.

The startup has raised at least US$100,000 in pre-seed funding round from undisclosed angel investors.

Also Read: A blessed opportunity: Your guide in understanding SEA’s rising halal tech industry

Does being a startup in the sharia finance industry limit the type of potential investors ALAMI reach out to?

“There are no limitations that we feel from the investor side … as we are under the impression that sophisticated investors would value this niche and growing market,” Juniar answers.

He adds that the startup plans to raise a seed funding round in the second half of the year.

It also aim to struck more partnerships with more financial institutions, particularly banks.

“In terms of financial expansion, we target to lay the ground work in late 2018 and see if we can start to expand in 2019,” Juniar says.

Image Credit: ALAMI

The post ALAMI is on a journey to popularise sharia-based finance in Indonesia. Here’s how they do it appeared first on e27.