Team size: 16

What are the most significant cases and/or transactions that your legal team has recently been involved in?

One of the major highlights this year was that the team successfully secured financing worth US30m from a prominent institutional funder from the UK, Lendable. After a thorough due diligence process, and months of negotiations, the deal was closed in the first half of 2022. The deal was Lendable’s first sharia compliant financing in the world and we are proud to set the milestone as the pioneer in the sharia peer to peer industry that was able to close the deal successfully.

The facility was disbursed under the Wakalah bil al-Istithmar contract in hope to help the Micro-Small and Medium Enterprises’ financing gap. Through this deal, the company hopes that it can help accelerate the development of Indonesia’s halal industry that is currently being promoted extensively by the Indonesian government.

As sharia financing is gaining strength due to a behavioural shift among young Muslims in Indonesia and amidst the Covid-19 pandemic, the company also have successfully acquired the only sharia rural bank in Jakarta and transformed it into a sharia compliant digital bank- Hijra Bank. This will be the first and only rural sharia digital bank with its own mobile banking application with embedded sharia lifestyle features.

Did the pandemic lead to a lasting increase in the interaction your legal team has with the strategic plans of the company?

The company itself scaled up during this pandemic while also applying four days of work and remote working. The lack of commuting hours made more time for the employees to engage in a more intense collaboration, while also expanding the team from four persons to 16 persons in just six months. The flexibility of remote working enables the team to grow into their better selves, thus, more productivity to help achieve the company’s target.

What are some of the main legislative or regulatory changes that have impacted you?

The newly enacted Financial Service Authority Regulation Number 10/POJK.05/2022 regarding The Joint Funding Services Based on Information Technology (“P2P Regulation”) pushed peer to peer lending companies to be more prudent and have a robust compliance framework.

The P2P Regulation provides more detailed provisions as to how we should navigate the business in a more robust compliance framework. Some of the highlighted items are, for example, extensive corporate governance requirements, financial soundness, minimum equity provisions and limitations of the funder’s portion to be 25% of the final lending position at the end of each month.

Despite all of the challenges, we are optimistic that the company can still provide optimal financing for Micro-Small and Medium Enterprises in order to close the financial gap and to help their business scale-up.