How the p2p will generate money
Rundown of how it works with most of the companies in Indonesia.
The Investor side :
-Open an account on the KFUND app.
-Deposit money into your account (probably a minimum of $7.50 like most apps).
-Pick your risk tolerance. This is where the app's credit scoring system comes into play. If you want more return for your money, choose riskier loans.
-Pick the length of time (term of loan).
-A lot of apps have an auto-reinvest feature, where the app will reinvest funds in your account into new loans.
-Typical returns for investors will range from 18% to 30%.
The borrower side : (Simple)
-Open an account on the KFUND app.
-Verify your employment, and your business.
-Set up your credit profile.
-Enter the amount of loan and the term.
-Pay your monthly payments, or lump sum into your account.
Where KFUND makes it's money:
-Charge the borrower a commission on the loan 2% to 7% of the total loan value.
-Charge the lender 1% of the principal amount plus interest (for monthly repayments), or 5% of interest (for lump sum repayments).
-Charge lenders 5000 Rupiah ($.36) withdrawal fee when they take funds out of their account.
You can see why this is so attractive to people on both sides. For the lenders, getting a return of even 15% after fees is great. Even an average person can throw part of their paycheck into KFUND every week and invest in the highest rated loans and make good money. In the borrowers case, you may own a business that needs money for an inventory purchase short-term. If you don't have assets to pledge to the bank for collateral, or don't even have a bank near by, or don't trust the banks (all likely cases in Indonesia), this is a great solution done right through your phone.
Capital needed is more about scaling up KFUND. Getting more borrowers and investors using your app. The OJK requires only $75,100 paid up capital when you get registered, and $188,000 when you get your license.
The OJK is clearing out all the garbage. Since last year the number of illegal p2p shut down has grown to over 1,773. The companies that are registered-licensed get all that business.
