“We are remain open for different type of partnership with Turkish companies, most important for us is the similar mindset and objective.”
We are with Dima Djani, Founder and CEO of ALAMI, a sharia-compliant P2P lending platform focused on invoice financing for small and medium businesses operating in the Islamic Fintech space.
Welcome, Dear Dima. First of all, thank you very much for taking the time to answer our questions.
No problem – I am happy to share ALAMI story, so that more future Muslim entrepreneurs will, hopefully, get inspired!
- Could you tell us a little about yourself and your venture?
I was brought up in a mix Indonesian family, my mother’s family is the typical Indonesian religious family, and my father’s family is a secular one with many of them are diplomats in different countries. My upbringing shaped my mindset and I believe I am taking the best of both worlds; hence my vision of creating ALAMI, to be the leading global Islamic financial technology platform, starting from Indonesia.
Pre-ALAMI days, I worked at Citi Corporate Investment Banking division in Jakarta and Hong Kong, and subsequently moved to Societe Generale Indonesia. I was mainly involved in several landmark equity and bond transactions in Indonesia, such as Indonesia Government Bond and Sukuk, and Garuda Indonesia IPO, among others.
ALAMI started as an idea to revolutionize the Islamic financial industry as we know it. This industry has been stagnant in Indonesia for the last 30 years, and we believe that technology can create a differentiation to revive the industry. The idea of ALAMI was validated at the INSEAD Venture Competition in late 2017, where we were successfully became the runner-up in that competition.
Today, we have around 250 people in the team and ALAMI has disbursed a total of IDR 1 trillion (US$ 70 million) of financing to SMEs across Indonesia. We have more than 50,000 individual and institutional lenders, and we manage to keep the default rate at 0%. Moreover, the solution is very much needed by ~230 million Muslims and ~60 SMEs in Indonesia, where they can either get sharia financing for their business, or invest to help an SME to grow in a sharia-compliant way.
- How do you find Turkish banks and startups in terms of Islamic Fintech?
Turkey and Indonesia obviously have different banking landscape. From our initial research, Turkish banks are generally more efficient and the population is well-banked, relative to the Indonesian banking landscape. Therefore, it may be inferred that Turkish banks will have more capacity and capability to partner with startups in order to serve the markets more comprehensively. The Turkish fintech landscape is perceived as in the early days, as some of the supporting regulations are being drafted, especially for crowdlending/P2P lending vertical. I am sure that when the regulation is issued, Turkish fintech market will be very interesting, supported by the strong SME sector.
- What kind of messages do you give to the Fintech ecosystem in developed and developing countries?
I think the game would be totally different in developed and developing markets. In the developed market, the startup needs to be very specialized and go deep into one area. While in the developing markets, the startup should go wide and create its own defendable ecosystem. This is due to various factors such as the country’s data structure, regulation, competition, market size, and availability of funding.
What we did in Indonesia as a developing market is to go wide, yet being in a financial industry, we need to go relatively deep as well. We first operate as Islamic P2P SME lending startup since 2019, and expanding into Islamic challenger bank in 2021, and will be in the play to widen our presence in the digital halal industry.
- How is Islamic Fintech different from fintech from your point of view?
Similar to the different concept of sharia finance than conventional finance, where the former one follows the principles in Islam in order to ensure a transaction that is ethical, fair, and transparent, among others. The tech element is very important as it will give sharia financial player new business models that otherwise would not be technically possible. This is what makes Islamic fintech platforms can be very different to Islamic banks, compared to the conventional counterparts.
- Which markets does ALAMI aim to enter? What is the biggest obstacle in front of you? How do you plan to overcome this?
We have just completed our fundraising, so we are still strategizing our next market or segment that we want to target.
The biggest obstacle for us at the moment is scaling. We have gotten the product market fit, and now we need to scale it, while opening up more initiatives for the brand and business. One of the challenges is navigating between running very lean and imposing some structures in the team for efficiency. Nonetheless, we think that this is bound to happen, and the way we are addressing this is by getting good quality talents who share the same vision.
- How is the interest shown in ALAMI? Do you think about cooperation in terms of Islamic Fintech in Turkey? Why Turkey?
The interest to our solution is incredibly good, Alhamdulillah; shown by more than 50,000 lenders are gathered in our system, and we managed to keep monthly retention rate above 50%.
I think Turkey is an interesting market to explore given similar culture with Indonesia and the Government intention to push for innovation and participation finance. We are remain open for different type of partnership with Turkish companies, most important for us is the similar mindset and objective, that is to present Islamic finance in the best, most sophisticated way possible.
- What advice do you have for companies and entrepreneurs in terms of Islamic Fintech?
I think faith is numero uno. There will be many challenges in this sector, including from investors and target users who might not understand the potentials, the regulator that might take more time to regulate the industry, and the list goes on. At the end of the day, your faith and vision that can help you to push your idea every day. Surround yourself with likeminded team and advisors, find smart capital (VC), and always put in the intention that you are here for the greater good, not simply for monetary reward. Also need to bear in mind that this is a great responsibiity, so need to ensure that you have the best resources to execute.
Thank you very much, Dear Dima.
We were with Dima Djani, the Founder and CEO of ALAMI, one of the most important initiatives in the field of Islamic Fintech. He shared with us his company’s place in the fintech ecosystem and its emergence story. I hope that Dima and his team will be able to make a name for themselves with many more successes in the future.