Tech

Indonesia’s IDEAL gets rid of the pain of applying for a mortgage – TechCrunch


Applying for a mortgage is often a time-consuming and disorganized process, with tons of manual paperwork. Based in Jakarta, IDEAL Simplify the process with a platform that allows users to compare mortgage products and apply for them from multiple banks at once. The startup today announced that it has raised $3.8 million in pre-seed funding led by AC Venture and Alpha JWC, with participation from Living Lab Ventures and Ciputra Group.

The capital will be used to develop products, hire and expand its products. IDEAL eventually plans to add other key lending products and expand to more Southeast Asian countries.

Founded last year, IDEAL’s founding team includes Albert Surjaudaja, Ian Daniel Santoso and Indira Nur Shadrina, with Jeganathan Sethu joining this year. Prior to the launch of IDEAL, Surjaudaja served as head of operational strategy for OVO digital payment service.

IDEAL Founders Albert Surjaudaja, Indira Nur Shadrina and Ian Daniel Santoso

IDEAL Founders Albert Surjaudaja, Indira Nur Shadrina and Ian Daniel Santoso

Surjaudaja told TechCrunch that IDEAL was started “with the mindset that consumer lending in Indonesia was broken.”

“Used responsibly, credit is an important part of driving the growth of economies. It acts as an exponential effect in value creation,” he added. “With that in mind, Indonesia has the lowest credit-to-GDP ratio in the region, showing that there is a lot of economic value potential that can be unleashed. There are a number of reasons for this, but a major one is the lack of good, accessible options when it comes to lending products.”

Surjaudaja says that traditional retail banks offer a relatively poor digital experience for their consumer lending products, making them less accessible. On the other hand, there are P2P and BNPL lending startups, but their products focus on smaller, more consumer loans.

He said: “We feel there is a clear gap in the market, specifically for conventional consumer loan products, efficiency and larger ticket sizes offered on friendly digital platforms. with users.

Surjaudaja said IDEAL chose mortgages as its first consumer lending product because of its market potential, citing 2021 research from Bank Indonesia that says the country’s mortgage industry is valued at $39 billion , with an expected CAGR of 17% over the next 5 years. Generation Z and Generation Y are set to become mainstream in the home ownership sector.

Indonesia’s mortgage penetration rate is also just 3% of local GDP, one of the lowest in Southeast Asia.

Surjaudaja added that the traditional mortgage process is manual, highly fragmented and takes a lot of time and effort from the customer.

For example, most people lack information about how the mortgage process works, making it confusing. The document submission process is also manual and not standardized with multiple parties involved and documents with sensitive information are handled without confidentiality. Surjaudaja said consumers suffer from a lack of transparency about the pricing and availability of different options, and the opaque registration process means they have to contact their agent multiple times.

IDEAL’s digital platform seeks to address these challenges. While mortgages are currently mainly recommended by real estate agents, IDEAL allows buyers to choose their own mortgage products. It also has a feature, called IDEAL Check, that allows anyone to check their credit instantly.

It helps users choose a mortgage by calculating the cost and installment amount, and includes a direct application system that allows users to apply for multiple banks with one set of data and systems. real-time tracking. IDEAL says its digital system is secure and minimizes human errors and data leaks that often occur in message or paper-based application-based mortgage processes.

Other features include detailed information on asset units from IDEAL’s developer partners, various mortgage products from banks, and IDEAL Compass, a short questionnaire that helps the platform understand What the customer needs and generates simulations of monthly payments, tenors, and other mortgage information.

The startup is currently focusing on primary housing marketing, but has plans to expand into secondary housing and mortgage refinance/takeover products. It will also launch a dashboard that helps users track and manage their mortgages. IDEAL also plans to expand into other major lending products, with a long-term vision to penetrate more Southeast Asian markets such as Thailand, the Philippines and Vietnam.

Surjaudaja said 60% to 70% of Indonesia’s mortgage market falls under the secondary housing category. “Our market research shows strong demand and demand from Indonesian consumers for an easy way to take over/refinance their existing mortgage, because of the gap between mortgage rates fixed and floating in Indonesia can be quite large,” with spreads of up to 10%.

IDEAL earns through commissions from banks and real estate developers for every successful loan application through this platform. It currently works with five banks, including CIMB Niaga, OCBC NISP and Maybank, and some of Indonesia’s largest real estate developers, such as Sinar Mas Land, Ciputra Group and Agung Sedayu Group. Its platform connects to banks through APIs to make the data collection process simple.

Some of IDEAL’s competitors include Pinhome, Cermati and Cekaja. Surjaudaja said Pinhome’s business model is more focused on real estate, providing end-to-end real estate-related solutions from home discovery to family financing. On the other hand, he describes IDEAL’s business model as “customer-centric” and leaning more towards fintech instead of proptech. Meanwhile, Cermati and Cekaja are financial aggregators that allow users to browse mortgage products from multiple banks, but Surjaudaja said they are not fully digital, providing no contextual data. and still requires an online-to-offline process, no pre-credit scores-check and pre-filter those who apply to the bank.

In a prepared statement, Adrian Li, managing partner of AC Ventures said, “Indonesia mortgage penetration is currently at 3% of local GDP. This figure is lower than that of Malaysia and Singapore, at 30% or higher. This presents an opportunity worth US$30 billion if Indonesia can double its mortgage rate to 6% through improved access to finance. IDEAL’s strong fit team has identified bottlenecks in the mortgage industry and brought in expertise in the fintech and real estate sectors to build a one-stop hub for mortgages in Indonesia. “



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