Bukalapak, Salim Group to participate in digital lender Allo Bank’s US$336M rights issue

Bukalapak and local conglomerate Salim Group are planning to invest 4.8 trillion rupiahs (US$335.55 million) in the Indonesian digital lender Allo Bank. 

As per a statement, the investment will be made through a proposed purchase of Allo Bank’s pre-emptive rights. Upon the rights issue (to be launched from Jan 13-19), existing stakeholder Mega Corpora will transfer US$83.56 million of its pre-emptive rights to Bukalapak. With this deal, the e-commerce major will become Allo Bank’s second-largest stockholder.

Local conglomerate CT Corp, Grab, Singapore’s automotive marketplace Carro, and Growtheum Capital will also participate in the rights issue. 

Allo Bank will utilise the proceeds to increase credit access to Indonesia’s small and medium enterprises (SMEs).

Also read: How digital banking is driving financial inclusion in SEA

Founded 30 years ago and controlled by local tycoon Chairul Tanjung, Allo Bank offers services, including personal and business banking, with features such as Pay later, Instacash, e-wallet, and remittance.

Last year, it obtained a digital banking licence from the Financial Services Authority (OJK), joining the heated competition with the digital units of Bank Central Asia and Bank Rakyat Indonesia.

The digital bank license covers time deposit, transfer, top-up, bill payment, payment, account statement, e-wallet, pay later, instant cash, and Merchant Presented Mode (MPM) QRIS.

With US$417 million raised in venture capital, Allo Bank claims to be the most well-funded digital bank in the archipelago.

According to financial comparison platform Finder’s “Virtual Banking Adoption 2021″ report, Indonesia ranks second in the share of adults with a digital bank account (24.9 per cent) among 30 countries and territories surveyed. The firm estimates that 28 per cent of people worldwide will have a digital bank account in 2026, up from 17 per cent in 2021.