This Indonesian fintech built its business on supply chain financing for MSMEs, recently announcing a fresh round of funding participated by Norfund, MUFG Innovation Partners, FinnFund, and Krungsri Finnovate to scale up their lending capital facilities.

Among many other advantages the company has built up over the years, we zoom into the importance of AwanTunai’s focus on the traditional FMCG merchants:

1️⃣ It was not an immediate discovery. AwanTunai iterated through several potential customer segments over its first two years, experimenting with over 10 different products, before launching the earliest version of their financing product.

2️⃣ Traditional general trade wholesaler-micromerchant transactions supply 80% of Indonesians with day-to-day necessities. As Dino puts it in the funding announcement, “[It] is large enough to achieve scale without having to branch out into too many different products or segments.”

3️⃣ The market ubiquity in the lives of Indonesians meant it was also less impacted by the height of economic pressures due to the pandemic. As Dino shared on our podcast in 2021, “We’re very, very fortunate to be solely focused on FMCG, basic necessities, and stable foods…this particular supply chain simply stayed open…and out of the pandemic, what really developed within AwanTunai is a very strong focus on managing risk.”

4️⃣ While finding the right risk management approach was not easy, once AwanTunai built its ecosystem with wholesalers and micromerchants, they were able to introduce POS software to develop their own risk engine.

5️⃣ AwanTunai’s first mover advantage in tackling supply chain financing for MSMEs in this segment paid dividends in the form of being able to attract top data science talent who also helped to patent the company’s risk assessment methodologies.

6️⃣ The robustness of AwanTunai’s risk management vis-a-vis the market potential has made it possible to build positive unit economics business even with a relatively smaller loan book. This lending efficiency creates greater alignment between profitability and growth as the company looks to expand its lending capacity.

7️⃣ At the end of the day, AwanTunai is making needle moving impact on the livelihoods of Indonesian businesses, on average helping suppliers grow 4-5x, and in one instance, helping one wholesaler expand from 2 warehouses over the past 8 years to 11 warehouses in just one and a half years.

👉 Insights taken from the recent announcement and the many conversations we’ve had with Dino and AwanTunai leaders since 2020

Interested in connecting with Dino? He’ll be sharing more lessons from building AwanTunai at this year’s Money20/20 Asia