Alibaba-Backed Fintech Akulaku Secures HSBC Financing, Aims for Double-Digit Growth

FINTECH - JAKARTA. Southeast Asian online lending platform Akulaku, which is backed by China's Alibaba , secured $100 million of debt financing from London-based HSBC, Akulaku's CEO said, as it aims to make the company more profitable.

William Li told Reuters in an interview on Friday the proceeds from the financing will be used to settle some of Akulaku's debts.

"The financials of the entire group are seemingly more and more healthier than before, so we are not in urgent (need) of raising money. We would like to see that the entire group is profitable and then we're considering whether raising money or not," he said.

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In 2022, Japan's Mitsubishi UFJ Financial Group (MUFG) and Thailand's Siam Commercial Bank invested $200 million and $100 million, respectively, in Akulaku.

Akulaku, which started operations in 2016, has a presence in the Philippines, Malaysia and Thailand, plus Indonesia, the major market for the company as it has a huge tech-savvy population.

The firm disbursed around $3.5 billion of loans last year, 25% higher than the previous year, and saw "mild growth" of around 20% in revenue last year to around $500 million, the CEO said.

This year, it is aiming to increase revenue by 16% to 25%, citing increasingly fierce competition in the online lending sector, but is hopeful that Indonesia's 2024 economic growth outlook of around 5% will support its target.

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Li also said the company planned to increases its physical presence in Indonesia, which contributed 90% of its total revenue. The firm will hire more local senior bankers to support its operations in Southeast Asia's largest economy.

Akulaku faced a temporary ban in Indonesia last year for its "buy now, pay later" service, with the country's financial services regulator saying it had failed to fulfill "mandatory actions". The ban was lifted last month following Akulaku's corrective actions.