Indonesian automotive group Astra boosts fintech plan with help from China

Alibaba Entrepreneurs Fund-backed WeLab and Astra are launching an online lending platform in Indonesia.

Image credit" Astra international.

Indonesian publicly traded company PT Astra International (IDX: ASII) is collaborating with Hong Kong-based fintech company WeLab to launch an online lending firm in Indonesia for unsecured consumer loans.

The joint venture is called Astra WeLab Digital Arta (AWDA). According to a report, AWDA received a capital injection of US$21 million to get started. While Astra has access to the Indonesian market, WeLab has the experience in the technical aspects of online lending.

The Chinese partner WeLab already operates online lending platforms. Its product in mainland China is called Wolaidai. In Hong Kong, it’s WeLend. And it’s flush with cash as well:  In 2017, It took in US$ 220 million in a financing round that included the Alibaba Entrepreneur’s fund,  a financing vehicle for early-stage startups in Hong Kong and Taiwan that’s supported by the mighty Alibaba.

AWDA is already registered with the Financial Services Authority in Indonesia, it says. That’s a prerequisite in order to be able to offer lending services to Indonesians legally.

With a partner as well established as Astra it’s no surprise that AWDA knows how to navigate the local bureaucracy. Several Chinese online firms who had tried to launch in Indonesia without a local JV in place and without proper registration with OJK were recently banned.

Astra International’s main business was in the trade of automotive part, but it’s no newbie to the tech space. It’s an investor in Go-Jek – the local ride-hailing and on-demand services app that’s rivalling Didi- and SoftBank-backed Grab.

Astra has also understood the traditional lending business. It operates multiple financial services subsidiaries, including a bank, and apparently does so successfully. Profits from these entities contributed the most to Astra’s net profit in 2017, according to a report.

By tying up with WeLab and launching the joint venture, Astra now joins the party of other major Indonesian firms who venture into fintech by collaborating with Chinese or other foreign tech firms. EMTEK, a media conglomerate, did so through a joint venture with Ant Financial.

Editor: Ben Jiang