Asia: Indonesia’s Pinjam online shop collaborates with Columbia to reach SMEs

Indonesia’s online pawnshop Pinjam recently extended their services to offer business loans to small and medium businesses (or SMEs) through a partnership with Columbia Cash and Credit. Columbia Cash and Credit is a non-banking financial institution, which offers loan and credit products.

Pinjam’s decision to offer loans to SMEs was driven by growth of small businesses in Indonesia as well as the challenges SMEs face in securing funding. Pinjam was launched in 2015 with the idea to connect borrowers with pawnbrokers. Customers who need cash can register their pawned items on the website, which offers 24-hour online estimation of the pledged product’s value.

After registration of the pawned item, the borrower can deliver the product by going directly to Pinjam’s partners or using a pick-up service. The range of tenure varies from 1 to 16 weeks with interest rates from 0.5% to 1.75% depending on the loan amount, tenure and value of the pawned item.

Within two years of its launch, Pinjam has generated 30,000 members and 2,000 loan applications. Around 70% of loan applications range from IDR 2 million to 5 million (USD $150-350), with the remaining 30% centered on the IDR 25 million to 50 million (USD $2,000-4,000).

The website has seen  traffic growth of 20% - 30% a month. Through partnership with Columbia Cash and Credit, Pinjam customers can apply for a loan by visiting any of Columbia’s 16 outlets in Jakarta. A Pinjam’s appraiser will then assess the value of the pawned item.

According to RFi Group data, around one in four Indonesian SMEs (27%) with an annual turnover below USD 10million are looking to take a business loan in the next 12 months. The collaboration between Pinjam and Columbia Cash and Credit can assist Indonesian SMEs to apply for business loans.

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