The why of Mekar Mekar facilitates business loans to SME businesses in Indonesia. It connects and matches SME's with financiers through Agents and innovative technology. It provides the infrastructure through which loans are distributed from financiers to SME's and collected otherwise around.

2. Bacan Island
North Maluku,
December 1st 2017, 9:00pm
“This Bakso is tasty,”says Naomi.
Naomi and Budiman are at the best Bakso stand in Labuha,
the main village of the Island of Bacan near Halmahera, part of
Maluku. Under the bright lights, they relish their bowl of Bakso
soup. It is raining lightly, the stand’s roof and bright lights,
make it cozier. But cozy it is not, both Naomi and Budiman are
angry and depressed. They are complaining about Andri, the
ferryman.
At the other end of the stand sits Yakub. While Yakub enjoys
his bowl of Bakso quietly, he hears their story.
The only ferry running from Bacan to other islands, is owned
by Andri. He has run the ferry for the last 10 years. Anyone can
operate a ferry between islands, with the right license. However,
at Bacan a license is not enough, you need to deal with Andri
and his extended family. They have successfully prevented
anyone else with a boat to start a ferry service, unless they want
to get into trouble. Those who already have their own boat, can
run their own business, but run a big risk if they take someone
else on their boat.
For new goods and gadgets you need to know Budiman.
He is one of the most sophisticated guys in the village. Using
his smartphone, Budiman trades goods between the islands.
Somedays he brings rice, other days it is toys or mobile phones,
it all depends on the season and what his clients want, or have
to offer. He has all the good contacts on the islands, and is well
informed about demand and supply between islands. Budiman

3. has more than average savings. Happily he can feel it every
night by the bulge under his pillow.
“Naomi, I really don’t know what to do with the situation
with Andri.”
“He just keeps asking for more, I’ve decided to stop trading
for a week or so. Maybe I should continue my business on
another island? Maybe I should do something else on Bacan?
Maybe open a stand and sell coconut drinks? I have to do
something before my savings are gone! What do you think,
Naomi?”.
On Bacan, everyone trusts Naomi, it was always like that.
Since she was a kid, people would ask her to run errands or
bring things to other people. You could say that Naomi is
Bacan’s version of DHL. She delivers official documents to and
from the district head office on the island of Halmahera. But she
also brings the post and packages for anyone who will pay her.
“It has been three months now, I am fed up!”she continues,
“I’ve refused to pay several times, but then he won’t take me,
and I’m stranded for 2 days”.
“Budi, we need to buy ourselves a speedboat, a fast one.
Then together we can continue our work and earn a living
again”.
“I’ve been thinking the same myself, but that is really
expensive, too expensive for my business alone. Even with our
savings pooled together, it is still not enough”, sighs Budiman in
frustration.

4. As they stare into their almost empty bowl, Yakub says
“Excuse me, I couldn’t help hearing your stories. Maybe I can
help”.
Yakub, has tidy hair, a soft voice and wears a tidy shirt with
a Blue“M”on a golden circle. He looks like he works for some
company.
“How can you help us??”replies Budiman irritably.“How can
you stop that nasty ferryman?”.“And what’s that logo on your
shirt? Who do you work for?”.
“No I can’t get rid of Andri, but I can lend you the money for
you to buy your speedboat,”Yakub says defensively.
“Oh…, are you the loan shark that everyone complains
about. The one that charges 8% to 10% per month? No, thanks!”
asks Budiman.
“No I’m a‘Mekar’Kredit Agent. The‘M’here, stands for Mekar.
I can lend you money at a much better rate than the loan
sharks. Probably even better than most banks. Just under 2
percent per month”Yakub answers.
“I would like to believe you, but I find that very hard. There
must be a catch somewhere,”says Naomi.
“Yes there is a catch: I only do business loans, no consumer
loans. You also need to have a bank account, your National ID
card and you need a mobile phone. Oh yes, and I can only lend
up to 50 Million Rupiahs,”Yakub says.

5. Naomi looks at Budiman,“We both have a phone, we both
need the money for business purposes, but Budi doesn’t have a
bank account, I do.”Naomi says.
“I can create a bank account for you and we can arrange the
loan right here at this Bakso stand,”Yakub smugly states.
“How?”Budi and Naomi both wonder. They don’t see a
briefcase, folder or any forms.
Yakub pulls out his large smartphone, also with the blue‘M’.
He starts his Mekar Kredit App.“How much is the speedboat
that you have in mind? Do you know? And can you share or
split the loan?”, he asks.
Budiman is still irritated,“Look you ask a lot of questions, can
we sleep on it and meet you tomorrow somewhere?”.
“OK, here’s what we can do, let’s estimate what the loan
will cost then I will BBM you all the information. With that you
can sleep on real information. And, yes, sure we can meet
tomorrow”. Yakub answers quietly.
“If there are no costs, fine!”, Budiman surrenders.
“How much would you need to borrow for the boat plus
some fuel?”Yakub asks.“It won’t be more than 35 million Rups”,
Budiman says. Naomi nods in agreement.
“OK, 35 then, let’s start with Naomi, since you already have a
bank account”. Yakub, opens the App and starts asking Naomi

6. what her postal delivery business is and how she earns money
with it. She blushes and says“Well I earn half a million Rups
every time I come to Bacan to bring & collect post and official
documents for the District head. I do that once a week. But
taking the ferry is costing me more every time, because Andri is
asking me for more‘bakshis’on every trip I take.”. Yakub knows
the district head, he quickly pops him a BBM,“Do you know
Naomi, doing the post from Bacan? Is she reliable?”.
“And what about you Budi? How much would you earn if
you could trade, using your own boat?”Yakub asks.
“About 2 million per week, but my costs are about half, so
1 million”, Budiman answers. Naomi looks a little surprised at
Budi. Budi proudly smiles back.
Yakub starts filling in the loan details on his App. There is no
wifi in these parts, but Yakub’s‘Bolt’Wifi transmitter makes the
connection to the Mekar server.
“OK 35 million, and since you, Budi, earn twice as much
as Naomi, your loan will be twice Naomi’s loan. Naomi’s loan
is 12 million, and Budi’s is 23 million. I will charge 1.8% per
month, and I expect you to repay 2 million rupiah per month
together. It will take 24 months to repay. You can pay back the
loan quicker if you want. Budiman and Naomi nod. Yakub asks
for their phone numbers and sends them an SMS with the loan
details.
Yakub hears a beep,“Naomi is VERY reliable”replies the
District head in his BBM.

7. “Well that’s it for now, let me know where and when you
want to meet tomorrow, you have my number now”, says Yakub
quietly.
“Selamat tidur”. The man with the blue shirt walks into the
darkness.
Budi and Naomi are all excited, and continue talking about
how to run their business with the speedboat, about the loan.
The ferryman is no longer haunting their thoughts.
The next day at 10am they meet at the same Bakso stall.
They’ve decided to do the loan.
Again Yakub is filling in the loan details and personal details
of Naomi and Budi. He takes their picture, and that of their ID
cards. He makes the phone connection with the Mekar server,
after two attempts he is connected.
Yakub looks up,“OK from this I can see that the loan is
approved for Naomi, but not yet for Budi.”Yakub states.
“Budiman, since you are a trader, you don’t have a bank
account, and have all your money in cash - I first want you to
do a psychological test to see whether you are able and really
willing to pay back your loan. It will take about 10 minutes for
you to complete, I can only approve your loan after the test.
Is that OK?”Yakub asks.
“Fine”Budiman replies, and starts answering the multiple
choice questions of the test on Yakub’s phone. 10 minutes later

8. the test shows that Budiman scores an 8 out of 10 on the test,
which is good.“Your loan is approved”says Yakub.
The test, developed in the USA, has reduced the default rate
on BTPN Bank’s loans by 40% in 2014. It gives a reliability score
of the borrower and is itself a reliable test, whatever the culture
of the respondent.
Meanwhile Yakub, like many Mekar Kredit Agents has an
agreement with a bank, to be able to create a bank account
on the spot, via his phone. Yakub fills in the form for the bank
account. Takes a picture of Budiman, takes a picture of his
ID card and takes a fingerprint scan of his thumb. The bank
account is complete. Yakub helps Budiman connect his phone
to his Wifi transmitter. He installs an App on Budi’s phone,
so that Budi can access his bank account to make payments
and check his bank balance. Through the new Laku Pandai
regulations, Budi gets the Account with a small insurance
included.
Wait, is this that easy? My loan request is approved right
away without any further verification from your company?”
Naomi is wondering.“And now I have the bank account via
mobile? How reliable is this?”Budi asks.
“We call this agent- or mobile-banking. All we need the
bank for is to create your bank account. We don’t need banks
anymore for the business loan. All the information you gave
including picture, ID card and your fingerprint are valid
enough,”Yakub convinces them.

9. “Let’s go through this one more time…”Her repeats the loan
terms, Naomi and Budi are happy, they agree.
“But you don’t seem to have cash on you? How do we get
the money?”Naomi asks.
“Easy, I will transfer it to your bank account. You have your
bank app in your phone, right? If you like, I will transfer 10,000
Rups to your account now, for you to see”– he does.
Naomi immediately opens her bank App, and sees the
transfer,“This is really spacy!”
Yakub gives his phone, and lets them read the loan
agreement. The speaker of the phone also reads the agreement
aloud.
“Are you still alright with the loan?”“Yes!”They both say
together.“Let’s get on with it!”.
Yakub asks them to place their thumbs on the finger scanner
on his smartphone, and to sign with the stylus on the screen.
“It is signed! We’re now almost done”, Yakub transfers the 23
millions to Budi’s account, and 12 millions to Naomi’s account.
While Naomi checks her account on her phone, Yakub helps
Budi to set up his phone with the banking App, to access his
bank account overview. There is no ATM on the island, and
Budiman couldn’t get a bank debit card from Yakub. The bank
transactions are all handled by mobile phone.
Three months later Naomi and Budiman race across the waves
in their speedboat. Fully loaded with goods and post. Not only
from the existing clients, their business also expands and reaches
more clients coming from other islands. They are earning more than
double what they expected. Within a year they’ll have paid have
repaid their full loan.
A week earlier they had recommended Yacub to other friends,
and even the Bakso stall owner has now expanding his business
adding more menu in the stall as well as opening a butcher shop
with a Mekar Kredit Loan.
Yakub has earned a 2% loan acquisition fee over the loan sum.
He earned 200,000 rupiahs for opening the bank account and he
will and will earn 5% over the loan once everything is repaid. A year
later he has earned 2.6 million Rupiahs from his encounter at the
basko stall. He is an independent entrepreneur, not an employee,
and he is earning about 10 million rupiahs a month. And he is
offering the lowest interest rates on business loans.

10. The“Mekar Kredit”agent infrastructure, is a Sampoerna
Initiative. It started in 2015, three years ago. There are now 3000
agents like Yakub. They are independent entrepreneurs, that
earn more than a bank employee. Yet through the use of clever
technologies and no overheads, like branch offices - Mekar is
able to offer very low interest loans to businesses.
Over 300,000 businesses have now received a Mekar Agent
Loan. These businesses have increased their sales by more
than 20% per year and they have together created more than
1,5 million jobs in 3 years.
Mekar Kredit started three years ago in Bali with 100 agents
like Yakub. From there agents were trained at the Mekar
Academies in Surbaya, Bandung, Makassar, from where it grew
into Java, Sulawesi, Maluku and the Eastern provinces.
MEKAR aims to have a network of 10,000 agents providing
USD 2 billion in low interest loans to growing businesses all
across Indonesia. With the agents and the growing businesses
MEKAR will create 1,000,000 new jobs a year.
Let your business blossom !
MEKAR
A Sampoerna Initiative.