Walmart partner with Bank Jago Indonesia first digital bank
JAKARTA – US venture capital firm Ribbit Capital, a fintech solution partner of the world’s largest retailer Walmart, has bought a minority stake in a Jakarta-based digital bank that also counts Singapore sovereign wealth fund GIC as an investor.
Bank Jago, Indonesia first full digital bank, which aims to tap not only urban customers but also the low-income in the country who are often underserved, has partnered with various online ecosystems, including Gojek, a ride-hailing application that has expanded to food delivery and other services, and Akulaku, which finances online shoppers.
Gojek is a key shareholder and strategic partner of Bank Jago. In March this year, GIC acquired approximately a 9 per cent stake in the bank for about 3 trillion rupiah (S$285 million).
In a joint statement with Bank Jago early on Monday (Oct 4), Ribbit Capital managing partner Micky Malka said: “We are witnessing a revolution in digital banking around the world. Bank Jago has made tremendous progress towards growing digital banking services for Indonesians.
He said the bank’s commitment “to serve Indonesia’s consumers with the best digital banking and fintech products” matches that of global peers and added that Ribbit Capital looks forward to participating in this journey.
Ribbit Capital, which invests in early-stage companies, including online brokerage firm Robinhood, did not disclose the size of its investment or the stake in the bank. The venture capital firm has made several profitable investments in fintech companies, including Affirm, a United States online shopping financing provider.
Bank Jago said it viewed the Ribbit Capital move as a vote of confidence. President-director Kharim Siregar said: “This is an important validation – that one of the world’s leading fintech investors, Ribbit Capital, recognises Bank Jago’s impact on progressing digital financial inclusion in Indonesia.”
In January this year, Walmart announced the creation of a new fintech start-up designed to develop and offer financial solutions, in a strategic partnership with Ribbit Capital. The joint venture combined Walmart’s retail knowledge and scale with Ribbit’s fintech experience.
Digital banking is expected to provide a boost to Indonesia as it will cater to the unbanked in the country, which stands at up to one-third of its population of 270 million people. Meanwhile, smartphone penetration in the country has reached between 70 per cent and 80 per cent.
In a recent interview with The Straits Times, Bank Jago commissioner Anika Faisal said: “Banks must be present in digital ecosystems; this is how people do their banking nowadays, instead of visiting a bank.”
Bank Jago has pledged to take a consumer-centric approach, Ms Anika said, adding that a digital bank provides customised banking.
“In the past, customers would adjust to bank products on offer. But banks must now adjust to the customers. How do customers want to do it? That’s the way the bank should do it. Banks now follow the customers, not the other way around,” she said.