SEA tech companies invest in Allo Bank

Indonesian tech giant Bukalapak, along with Grab, Carro and Growtheum Capital Partners, have invested in Allo Bank Indonesia, to accelerate the expansion of credit services across Indonesia. Bank Allo is a fully licensed bank offering personal, business, joint accounts including Paylater, InstantCash, savings and time deposits, e-wallet, top Up, payment and transfer services. The latest capital raising will increase Bank Allo’s core capital to over IDR six trillion, making Allo Bank one of the most well-capitalised digital banks in the country.

Allo Bank commissioner, Ali Gunawan, said, "We are excited to launch our lending services in Indonesia, home to a population of close to 280 million people, where 50% do not have a bank account and a further 15% are considered “underbanked” with limited access to credit, investment and insurance products." He added that the bank hopes to provide convenient access to financial products to the entire Indonesian population through a brand that they know and trust.

According to Nikkei Asia, Allo Bank is planning to sell over 10 billion shares at IDR478 per share from 13 to 19 January. After the transactions, Bukalapak will hold 11.49% (worth IDR 4.8 trillion) of Allo Bank, while Singapore-based companies Grab and Carro, both through separate affiliates, will hold 2.07% and 0.69% of the bank's rights respectively. 

Willix Halim, interim CEO of Bukalapak said in a statement that through its Mitra business and its connectivity into the new verticals of the MSME market, the partnership can enhance its offering; and the accessibility of credit to these rural entrepreneurs will allow for an even deeper and wider penetration into all corners of the Indonesia market. “Combining the tech capability with the offline touchpoints, we can really accelerate the roll-out of these banking services across the country – very much in line with the Government’s financial inclusion policy, given that MSMEs contribute close to 60% of the country’s GDP," he added. 

Launched in 1992, Allo Bank is a fully licensed bank offering personal, business, joint accounts including Paylater, InstantCash, savings and time deposits, eWallet, top Up, payment and transfer services.

The investment into Allo Bank by Bukalapak, Grab and Carro is the latest example of the growing interest among the region's tech companies in Indonesia's digital banking sector. For instance, GoTo, a merger between Gojek and Tokopedia in Indonesia, owns 21.4% of Bank Jago, Nikkei Asia reported. Following which, Jago was integrated as a cashless payment method on the Gojek app in Indonesia to provide Jago customers increased convenience when transacting on the Gojek app.

Last month also saw WeLab, a pan-Asian fintech platform, take on the Indonesia market with the acquisition of Bank Jasa Jakarta, a commercial bank in Indonesia. Through the acquisition, it plans to launch its second digital bank in Asia further to the launch of WeLab Bank in Hong Kong. WeLab plans to launch this second digital bank in Asia in the second half of this year.

Indonesia represents a huge opportunity to provide accessible and innovative digital banking solutions. While home to around 180 million tech-savvy younger consumers, Indonesia is one of the largest financially underserved markets in Asia, with an estimated 77% of its population being either unbanked or underbanked.

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