Islamic Finance

Indonesian Islamic P2P lender Ammana Fintek Syariah eyes international expansion starting with Malaysia

JAKARTA – Indonesian Islamic peer-to-peer lender Ammana Fintek Syariah is keen on entering markets outside its home country, starting with neighbouring Malaysia.

The fintech company’s CEO Lutfi Adhiansyah Muftie told Salaam Gateway he met with Malaysia’s Securities Commission, and started the process of getting a licence to operate in the country.

A spokesperson for the regulator told Salaam Gateway it cannot in this case divulge any information but an official present at the meeting confirmed the Indonesian company’s interest to operate in Malaysia.

Lutfi told Salaam Gateway Ammana is seeking low-cost financing and to empower MSMEs in Malaysia through cross-border transactions with Indonesia.

“This year we have the goal to expand into international markets to access foreign funds and to provide low-cost financing," said Lutfi. 

He said Indonesian investors typically demand higher returns for their investments, for example, 6% p.a. for time deposit savings or a minimum of 12% p.a. for banking products. In contrast, foreign investors would consider 4%-6% p.a. as normal competitive returns, and in some countries in Europe, and Japan, offer negative returns for bank savings products.

Lutfi said Ammana is also planning to develop social financing, contract farming financing and cooperative joint financing for its Malaysia operations. The fintech already offers these options for its Indonesia platform.

Ammana is also eyeing Brunei and Dubai as part of its international expansion.

The Shariah-compliant fintech is in the process of applying to become a member of the international Islamic finance standards body the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), according to Lutfi. He hopes membership of the global Islamic finance infrastructure body will increase Ammana's international visibility.

Ammana Fintek Syariah was established in July 2017 and secured a licence from the Financial Services Authority (OJK) last year. In 2019, it disbursed 17.6 billion rupiah ($1.29 million) in financing.

(Reporting by Yosi Winosa; Editing by Emmy Abdul Alim

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