MICROCAPITAL BRIEF: Fairbanc Raises Equity from Accion, ADB, East Ventures, Sampoerna Group to Boost Lending, Payment Systems for MSMEs in Indonesia

Fairbanc, a US-based lender and payment facilitator for micro-, small and medium-sized enterprises (MSMEs) in Indonesia, recently raised pre-Series A equity of an undisclosed seven-figure amount. Of the participating investors, those that have been identified were ADB Ventures, the venture capital arm of the Asian Development Bank (ADB); Accion Venture Lab, a unit of US-based nonprofit Accion; East Ventures, an Indonesia-based venture capital firm; and the Sampoerna Group, an NGO backed by Indonesian billionaire Michael Sampoerna. Fairbanc plans to use the funding to increase credit access for small retailers in Indonesia and develop a system which will help these retailers manage their inventory in general as well as ahead of adverse weather events.

Accion CEO Michael Schlein said, “the pandemic is far from over in Indonesia, and micro merchants are uniquely vulnerable to its economic impact. Fairbanc is filling a critical gap in access to credit for these entrepreneurs, helping them keep their shops open and sustain their livelihoods.”

Fairbanc’s platform allows MSMEs to access digital credit, connect with suppliers, and receive and send payments. Fairbanc has partnered with fast-moving consumer goods (FMCG) companies, such as Danone, L’Oreal and Unilever to provide users with a “pay-later option.” It also provides phone-based microloans for merchants. This loan system uses artificial intelligence to evaluate credit applications and provide decisions instantly.

Founded in 2018, Fairbanc serves approximately 60,000 merchants. The firm reports that its partnerships with FMCG firms have enabled its MSME customers to increase their sales by approximately 35 percent.

Accion created Accion Venture Lab in 2011 to serve as its “seed-stage investment arm.” The mission of the investment vehicle is to support “technology and [other] new approaches that help underserved people and small businesses benefit from the world’s formal economy.” It typically invests USD 500,000 in early-stage startups. As of May 2020, the majority of Accion Venture Lab’s 38 investees are active in microfinance and financial technology (fintech). Its parent entity, Accion, is a nonprofit that seeks to alleviate poverty by offering services such as microenterprise loans and business training. As of 2021, Accion has approximately 160 partners in 55 countries across Africa, the Americas and Asia.

ADB Ventures provides seed and equity investments to startups active in Asia. As of July 2021, it has invested in 13 firms that are active in 10 markets. ADB is an international development finance institution headquartered in Manila, the Philippines. The institution’s mission is to help its 68 member countries reduce poverty and otherwise improve the quality of life of Asia’s citizens. As of 2020, ADB had total assets of USD 272 billion, including a loan portfolio of USD 130 billion.

Founded in 2009, East Ventures is based in Indonesia and also has offices in Japan and Singapore. As of June 2021, it has raised a total of USD 190 million for five funds, invested in 411 firms, and acted as lead investor on 163 projects.

Founded in 2001, the Sampoerna Group is a nonprofit supporting social development and education projects in Indonesia. Financial data on the organization is available via its website.

By Sophie Fiala, Research Associate

Sources and Additional Resources

Accion press release
https://www.accion.org/fairbanc-secures-funding-from-adb-ventures-accion-venture-lab-east-ventures-and-sampoerna-to-scale-indonesians-micro-merchants-access-to-embedded-credit-products

Fairbanc homepage
https://fairbanc.app/

Accion homepage
https://www.accion.org/

ADB homepage
https://www.adb.org/

ADB Ventures homepage
https://ventures.adb.org/

East Ventures homepage
https://east.vc/

Sampoerna Foundation homepage
https://www.sampoernafoundation.org/

Crunchbase profile on Fairbanc
https://www.crunchbase.com/organization/fairbanc

Crunchbase profile on East Ventures
https://www.crunchbase.com/organization/east-ventures

Previous Accion press release
https://www.accion.org/lami-technologies-closes-1-8-million-seed-funding-to-accelerate-growth-of-digital-insurance-in-africa