Indira Shadrina and her friends kicked off IDEAL in 2021, which is a property technology startup that helps Indonesian young people to purchase houses through responsible lending. Indonesian millennials could only afford to purchase houses located far from the city center due to the constant increase of property price.
The global COVID-19 pandemic in the past two years has forced governments to impose lockdown in their respective country, including Indonesia. The policy prompted offices to allow their employees work from home (WFH). Therefore, these young people feel the need to own their property.
IDEAL offers an end-to-end platform that ensures data security for product comparisons, simulations and housing credit applications for three banks at once.
“We set a target for property financing since housing is a basic need. It has a potential huge market and is very resilient,” Shadrina said on October 27, 2022.
Survey indicates that millennials’ primary concern when applying for housing loan is rejection. The application process usually takes a long time. If their application was rejected, they must begin the process all over again, including contacting the banks.
“IDEAL provides them with the opportunity to apply for housing loans at three banks at once,” Shadrina explained.
Housing loan assistance for consumers and banks
Shadrina said that IDEAL focused more on financing properties through housing loans. The start-up currently partners with seven banks, namely CIMB Niaga, OCBC NISP, Danamon, Maybank, Panin, Permata dan the country’s largest lender Bank Mandiri. It also works together with major property developers such as Sinar Mas Land, Ciputra and Agung Sedayu Group.
In addition to the e-KYC (electronic Know Your Customer) process, IDEAL also helps banks with credit checks. IDEAL verified that the customers’ ID cards were issued by the Home Ministry’s Population and Civil Registry (Dukcapil) and traced the credit history of potential customers before sending the data to the banks.
Since the establishment of the start-up, it has around 500 users. The customers’ feedback has been positive regarding the application process and the collection of documents, as well as the rapid decision-making in five working days regarding the eligibility of the application.
“We are satisfied because our solutions make the lives of all stakeholders easier,” Shadrina said.
As IDEAL facilitates consumers in applying for housing loans in three banks simultaneously, the likelihood of the customer in securing a loan is higher. “Currently, one of the three banks has approved the credit applications,” she added.
Business expansion
Shadrina explained that IDEAL had raised US$ 3.8 million from several capital ventures, including AC Ventures, Alpha JWC, Sinar Mas Land’s Living Lab Ventures and Ciputra Group. “We will not be seeking funding shortly. The fund is already large enough,” she said.
Her company is currently focusing on expanding its ecosystem to gain more traction. IDEAL’s ecosystem includes the development of properties, banks and end users. “We plan to reach more end users next year with our launching campaign,” she said. In the following year, IDEAL aims to reach one million users.
Sinar Mas Land’s Chief Transformation Officer, Mulyawan Gani, said that as an investor in IDEAL, his company recognizes the importance of digital technology in developing the property sector. As a result, Sinar Mas Land begins to focus on supporting the development of property technology.
“Sinar Mas’ commitment to transforming the digital ecosystem has encouraged the company to establish Living Lab Ventures (LLV) to expand its business portfolio. This investment arm enables us to accelerate and finance Indonesian start-ups to promote technological innovation. Since its launch in the middle of this year, LLV has received warm and positive responses from property technology start-ups,” he said.
Challenges
Data from Bank Indonesia (BI) revealed that the property sector’s non-performing loan (NPL) as of February 2021 was at the level of 2.90%. The NPL decreased slightly from the previous year in February 2020, which was 2.97%.
For 2022, Indonesia has seen the trend of property recovery, vibiznews.com reported. With the reduction of public activity restrictions (PPKM) and the returning of business to normal operations, the housing market is showing a positive stretch. Some data shows that there is an increase in house sales in the Greater Jakarta (Jabodetabek) area of around 30% in the first semester of 2022 on an annual basis.
Meanwhile, BI housing survey (SHPR quarter II-2022), which was conducted in 16 major cities in Indonesia, showed an increase in prices and sales of residential or residential properties by around 30%.
