This Service Is Projected, When Added to Its Present Robust Online Payments, Shopping and Gaming Platform, to Enable the Company to Break Into Profitability in 2020
Kinerja Sukses Gemilang’s is a major achievement for KinerjaPay Corp. The Company successfully passed numerous stress tests of the system by the Indonesian regulator. The OJK is forcing all non-regulated platforms to license or close. Achieving certification after nine months of testing is a testament to the many dedicated employees involved.
Read More: Thales Study: US Financial Institutions Have Highest Rate of Data Breaches Despite Strict Compliance Mandates
P2P lending connects individual, institutional investors as well as the Company’s subsidiary itself with other individuals or small businesses that need capital. Interest rates are significantly higher than those charged by banks but are lower than black market, loan shark prices. The platform which will immediately be offered to KPAY’s well over 600,000 active users, allows the users to lend to each other with the company acting as agent. The Company believes that this function will become its “killer application” of the KPAY business. The Company estimates an agency fee of 8-10%. The Indonesian market for these loans hit $3.1 billion in June 2019 up from nearly $20 million in 2016, for a 155 times increase over three years. This market is in its infancy and should easily surpass $10 billion over the next few years. If the Company were to capture 1% market share, it would earn a 8-10% fee on loans totaling $100 million. This could represent revenues of roughly $2 million /monthly purely as an agent.
The more significant revenue opportunity comes from acting as a principal. The Indonesian market for non-bank loans has of vast potential. There are 63 million MSMEs and only about 25% have access to financing. Similarly, the OJK estimates there are nearly 130 million lower-to-middle income working age individuals who have no access to credit. The Company has arranged access to non-equity lending sources for the US parent, KPAY to act as a principal using its own platform to lend to these MSMEs as well as individuals who have verified employment. The Company already has stringent due diligence protocols as well as KYC software to limit defaults. The Company estimates that the average loan to a verified working individual, which will have employer enabling garnishment, should be in the range of $200 to $300 with a payback of 30 to 90 days. The average loan to an MSME will be in the range of $1,000 to $5,000 with the same loan duration as above. The Company believes achieving 25,000 loans/month to individuals given its present customers is achievable within a year. This could generate revenue in excess of $1 million/month with high operating margins. If the Company is able to reach 5,000 MSME loans, its monthly revenue could approach $2 million/month.
Read More: Starship Raises $11 million to Expand Access to Health Savings Accounts
Mr. Edwin W. Ng, Chairman & CEO of KPAY commented “Receiving one of the few certifications from the OJK while they are aggressively regulating foreign non-registered lenders presents KFUND the opportunity to rapidly grow into a highly profitable online lender. The agency and principal revenue streams will be significant as we execute. Our access to US capital will give us a significant advantage over local competitors. Based upon achieving small market shares, it is possible to record revenues close to $5 million/month sometime over the next two years. Of course, we need to execute!”
