Business Development Proposal PEER-TO-PE

Business Development Proposal
PEER-TO-PEER LENDING PLATFORM: MY

FIRST CAPITAL
Kemal Salim Ashshidiqi

ARU-L0054TJGTJG1115
Submitted in fulfilment of the requirement of the

Master’s degree to Anglia Ruskin University for the
degree of Master in Business Administration (MBA)
Supervisor: Dr K V Shenai
November 2016
Declaration
I hereby declare that this Business Development Project entitle PEER-to-PEER

LENDING PLATFORM: MY FIRST CAPITAL submitted to Anglia Ruskin
University is an original work under direction of Dr K V Shenai and that I have
correctly acknowledged the work of others. This Business Development Project is
in consonance with University guidance in conducting good academic practice.
London,
Kemal Salim Ashshidiqi
2
Table of Contents
LIST OF FIGURES .......................................................................................................... 4
LIST OF TABLES ............................................................................................................ 4
ACKNOWLEDGMENT ................................................................................................... 6
EXECUTIVE SUMMARY ................................................................................................. 7
CHAPTER 1: INTRODUCTION ........................................................................................ 8
1.1 BUSINESS BACKGROUND ................................................................................. 8
1.2 SELECTION OF A SCENARIO ............................................................................. 9
1.3 THE BUSINESS OPPORTUNITY ................................................................................ 9
1.4 REPORT STRUCTURE ............................................................................................. 12
CHAPTER 2: BUSINESS OPPORTUNITY ......................................................................... 14
2.1 THE BUSINESS OPPORTUNITY ............................................................................... 14
2.2 BUSINESS CONCEPT .............................................................................................. 15
2.3 BUSINESS MODEL ................................................................................................. 18
CHAPTER 3: FEASIBILITY ............................................................................................. 20
3.1 MARKET RESEARCH METHODOLOGY .................................................................... 20
3.2 MARKET RESEARCH AND PRODUCT SERVICE ......................................................... 22
3.3 INDUSTRY AND COMPETITION .............................................................................. 35
3.4 ORGANIZATIONAL FEASIBILITY ............................................................................. 36
3.5 FINANCIAL FEASIBILITY ......................................................................................... 38
3.6 RESOURCE SUFFICIENCY ........................................................................................ 46
CHAPTER 4: STRATEGIC ANALYSIS AND BUSINESS MODEL .......................................... 47
4.1 INTERNAL ENVIRONMENT ANALYSIS OF MY FIRST CAPITAL .................................. 47
4.2 EXTERNAL ENVIRONMENT ANALYSIS .................................................................... 54
4.3 BLUE OCEAN STRATEGY AS BUSINESS STRATEGY .................................................. 57
4.4 SUBSCRIPTION BUSINESS MODEL ......................................................................... 58
CHAPTER 5: BUSINESS PLAN ....................................................................................... 61
5.1 BUSINESS PLAN OVERVIEW ................................................................................... 61
5.2 PROPOSED PLAN OF ACTION ................................................................................. 64
5.3 EXIT STRATEGY ..................................................................................................... 67
REFERENCES ............................................................................................................... 68
BIBLIOGRAPHY ........................................................................................................... 75
APPENDIX ................................................................................................................... 77
Word Count (Ch1-5): 11793
3
List of Figures
• Figure 1: My First Capital Logo
• Figure 2: Map of Indonesia
• Figure 3: Jakarta City
• Figure 4: Beltway Office Park
• Figure 5: Development projection of P2P lending in 2017
• Figure 6: My First Capital Positioning
• Figure 7: P2P lending platform business model
• Figure 8: Reasons for loan in developing countries
• Figure 9: P2P lending growth
• Figure 10: Indonesia’s position in global market
• Figure 11: Top five emerging markets with the best middle class
potential 2015-2030
• Figure 12: Number of Indonesian having an account at formal
financial institution
• Figure 13: Source of GDP financing (Q4-2015) in Indonesia
• Figure 14: Segmentation of customers
• Figure 15: My First Capital product life cycle
• Figure 16: Organizational structure
• Figure 17: Break even analysis
• Figure 18: Resource-based View
• Figure 19: Value chain
• Figure 20: Blue Ocean strategy
• Figure 21: Business model canvas
• Figure 22: Mandiri Bank
• Figure 23: BBC Indonesia
• Figure 24: Indonesian Fintech Association
List of Tables
• Table 1: Scale and growth anticipation

• Table 2: MFC’s competitors
• Table 3: My First Capital Segmentation
• Table 4: Variety of loan available
• Table 5: New-venture capital
• Table 6: Initial Expenses
• Table 7: Sales projections
• Table 8: Depriciation
4
• Table 9: Income statement
• Table 10: Cash Flow projections
• Table 11: Payback period
• Table 12: Break even analysis
• Table 13: SWOT analysis
• Table 14: My First Capital opportunities and threats
• Table 15: My First Capital’s plan of action
5
Acknowledgment
Alhamdulillah, praise be to Allah S.W.T, the almighty and the creator of the
world, may his mercy and blessing be upon to prophet Muhammad S.A.W, the
leader of messenger and the perfect human role model. I fell blessed to finally
coming to the near-end of my study in London which will never happen without
the support and compassion from dear parents’ back home. I would like to thank
for all the greatest effort and I really appreciate it.
Further, I would like to express my highest appreciation to all lectures teaching

me in LSC, especially to Dr Vijay Shenai as a really supportive supervisor, Dr
Rajendra Kumar, and Rachel Blackman as an administration. LSC teachers are
dedicated, intelligent, and friendly teacher, indeed.
To sum up, thanks to all friends in London who fight hard to get this far together,
I wish you a pleasant future career ahead and see you guys on top! And lastly,
thanks for allowing me to stay in this loving city dear London, I am going to visit
you real often!
6
Executive Summary
Business world is moving faster year by year, there are many businesses
established yet many fall due to tough competition. Businesses are either to
innovate or will be left behind, that’s the only way sustain and survive in the
modern competition. The challenge is more difficult regarding to the new venture
or business start-up., “an organization establish to discover an applicable and
repeatable system is definition of start-up"(Blank and Dorf, 2012). This following
is a business development plan of new start-up, a brand new peer-to-peer (P2P)
lending platform. The platform will be accessible from the website and it names is
“My First Capital”.
The concept of “P2P lending was found in UK by the platform name, Zopa. It
established this platform back in 2005” (Zopa, 2016). Then P2P lending platforms
experience a massive development in the UK, US, and western Europe while in
Asia especially Indonesia, this concept brought in about no more than 3 years ago.
Singapore and China are two countries having significant development in P2P
Lending platform and generally in Financial technology (Fintech) improvement.
Therefore, there will be much challenge and obstacle during introduction of our
platform but also high potential in the Indonesia market ahead as “Indonesia
consist of approximately 255 million citizens across the nation and with the
highest GDP in Southeast Asia” (World Economic Forum, 2015).
My First Capital (MFC) will utilize technological approach significantly,

establishing a website is our main method to capture and interact with the
consumers in Indonesia market. MFC play as an intermediary for lenders and
borrowers in the P2P lending platform, providing the borrowers with competitive
credit interest while assisting lenders to gain higher return than banks do.
Currently, there are fewer P2P lending platforms such as ModalKu, Koinworks,
and Investree, name mentioned first was the leading P2P lending platform in
Indonesia as they were the first player which established about 3 years ago.
7
Chapter 1: Introduction
1.1 Business Background
Inspired by the evolution of financial technology (Fintech), peer-to-peer (P2P)

lending platform emerged as one of the innovation in financial service industry.
Filling the gap between other big established banks and come up with a brilliant
solution on distributing and providing loan credit. In fact, the discovery of P2P
lending is inseparable from the emergence of Crowdfunding. Freedman and
Nutting (2015) define crowdfunding as “an approach of gathering a lot of
contributions through online platform to defray or acquire a company”. The first
establishment of crowdfunding occurred in 2003 when Brian Camelio came up
with ArtistShare where Indy musician could look for donation from their fans in
order to create digital album.
Following the emergence of crowdfunding platform as one of the Fintech method,

P2P lending platform was found in UK about eleven years ago. Since then many
companies such as Zopa, Ratesetter, Funding Circle and others enliven the P2P
lending competition. Then, the development was brought to US and western part
of Europe while the Asian continent experienced P2P lending platform just in
approximately 6 years ago. P2P lending platform entered Indonesia market in
2013 and since then only fewer companies compete in the industry. Considering
the existing reality, we believe that creating P2P lending platform company called
“My First Capital” will be beneficial not only to the platform reaping the profit,
but also consumers gaining the return and competitive interest rate.
Figure 1
My First Capital Logo
8
1.2 Selection of a Scenario
The purpose of making business scenario is elaborating words that will be used to
ensure this business development plan is on the right track. An expert said
“Sometimes a business start growing by looking at the buyers and market
problems” (McGiven, 2009). There are five scenarios available for BDP;
establishing new company, entrepreneur company as established firm’s owners,
our current organization which we work, and commercial or NGO. Therefore,
creating a whole new business is the choice of this development plan as it should
assist the writer to master the market and industry condition. a start-up can
compete with bigger player by finding a gap in the market, on matters that annoy
customers and come up with a product/service which solve their problems,
otherwise the start-up might find it tough just to survive the competition.
1.3 The Business Opportunity
1.3.1 Rationale behind the business idea

“Every venture required to be created base on customer needs rather than any
other reason or criteria” (Filfield, 2012). The author statement mentioned is a very
first step to establish new venture then the next progress will be looking on the
market potential and finding a gap within it. My Fist Capital, shortened to MFC
later on, will be built in the capital city of Indonesia, Jakarta. Indonesia located in
Asian continent, more precisely in Southeast Asia, “it’s a country with more than
263 million citizens living in thousands of island across the country”
(Worldometer, 2016). There are five main islands where most of population live,
Sumatra, Java, Borneo, Sulawesi, and Papua. To understand more about Indonesia
location and islands, lets take a look the map below:
9
Figure 2
Map of Indonesia
Source: Sea city maps
Moreover, MFC will be established in Jakarta, home for 10 million people and
during the working hours, the figure increase to 12 million people. Considering
the number of citizens and the birthrate across the nation, it would be a massive
potential of people becoming our customers in the future. MFC will has the office
in the south Jakarta to save the cost and considering MFC will use websites as a
bridge to connect borrowers and lenders in the nation.
Figure 3
Jakarta City
Source: The Wise Traveler
10
The future office will be located in south Jakarta which is not far from central
Jakarta. The office location is on the famous business complex road on
Simatupang Street, Beltway Office Park. The complex offers safe and comfortable
working environment, nearby the toll road, facilities such as restaurant and gas
station are available next to the business complex. Many businesses in various
industries takes an office space within the business complex. The ultimate reason
to take this location as our office is easy access to reach the location from any area
in Jakarta and other satellite city around it such as Depok, Tangerang, and Bekasi.
Figure 4
Beltway Office Park
Source: Regus
1.3.2 Target market, customer and market accessibility

People living in Indonesia is our target market while the target customers are
Small-Medium Enterprises (SMEs) across Indonesian archipelago, although our
office is located in Jakarta, the reachability of our business cover all Indonesian
island. This market is accessible for some reasons; Indonesia is a country where
approximately 50 million SMEs live, Internet coverage improved rapidly
especially when company such Google develop its project loon in Indonesia in
order to ensure Indonesian enjoy internet coverage. (The Guardian, 2016).
11
1.3.3 Business model
We looked up the business model available today on Harvard business review
(HBR) ranging from the advertising model, the freemium model, pay as you go
model, franchising model to the low-cost model. The business model used should
be the subscription model, the business model allows MFC to gain revenue in the
long term as customer bound with us for a certain period of time. We provide
interaction between two parties, lenders and borrowers coming together into our
platform; My First Capital. We act as an intermediary for both parties for
particular return. The borrowers are likely to look for more competitive interest
rate while lenders are likely to look for higher return.
1.4 Report Structure
This business development plan consists of some chapters to help us reading it:
1. Chapter one: The very first chapter presenting the business background,
selection of scenario on which method applied for this venture. The
following is rationale of business opportunity, rationale behind the
business, target market, customer and market accessibility and finally the
business model of the venture.
2. Chapter two: Chapter two is elaborating the business opportunity as well
as its concept including business idea, vision and mission, and products
and services. The complete business model is the next discussion closing
the chapter two.
3. Chapter three: The third chapter is business feasibility ranging from
market research methodology to market research and product service.
Company product life cycle (PLC) is discussed under industry and
competition. To sum up, organizational and financial feasibility is
completing the chapter.
4. Chapter four: The fourth chapter is not only investigating and
interpreting the external and internal factors faced by company but also
coming up with solution and strategy to overcome the factors. Next, the
12
business model will be discussed deeply in order to comprehend the
business clearly.
5. Chapter five: The fifth chapter should evaluate the whole aspect of BDP
including actions plans, limitations, success factors, proposed plan of
action and exit strategy.
13
Chapter 2: Business Opportunity
2.1 The Business Opportunity
Year 2013 marked the moment when P2P lending platform launched their
existence in Indonesian market. It was Modalku who introduced its platform
before anyone else did in Indonesia. Although the term of P2P lending was not
common during Modalku emergence in 2013, the platform had quite a decent
performance for following 3 years’ performance. “They have been partnering with
many banks since 2013, and the most recent was became partner of Sinarmas
bank” (CNN, 2016). Year 2016 also experienced a massive growth when
“Modalku got investment of £5.7 million from Alpha JWC Ventures and that
amount is claimed as the biggest figure that ever achieved by P2P lending
platform in Southeast Asia” (Pratama, 2016). To sum up, the P2P lending
platform in Indonesia is flourishing and expected to perform strong in 2017.
Figure 5
Development Projection of P2P Lending in 2017
Source: UBS Evidence Lab
14
The above figure shows the growth prediction issued by UBS Evidence Lab
plotting P2P lending platform will grow by 19% globally. The developed
countries are likely to have lower growth than global rate while developing
countries are expected to exceed global rate growth. Indonesia is ranked number 2
with 47% growth in 2017. Considering the projections above, Indonesia is
projected to have the greatest growth among Asian countries, therefore it is an
opportunity for MFC to launch its P2P lending platform as “an entrepreneur
required to be creative by looking at the market needs and situation” (Stokes et, al,
2010). Judging current market situation and demand, it is a proper time to
establish a P2P lending platform to be involve in a promising industry and reap a
profit.
2.2 Business Concept
2.2.1 Business idea

Our business view of P2P lending platform coming from the situation affecting
SMEs in acquiring loan from the bank in order to expand or adding capital to their
business. To barely sustain the business and keep their business running, many
SMEs are getting loan from illegal money lender who charge extremely high
interest. Eventually, many SMEs are going bankrupt and has a mounting debt
toward illegal money lender. My First Capital is not facing or taking bank market,
we are working side by side to cover the loan for SMEs in order to boost national
economy in general.
2.2.2 Vision and mission

The focus vision of My First Capital is becoming the best peer-to-peel lending
platform in Indonesia by 2025. The ambitious vision will be nothing without
hardworking, decent business skill, and seriousness from all stakeholders involve
in the company. Certainly, the vision must be supported by structured mission,
here are My First Capital Missions:
15
1. Connecting the lenders and borrowers across the Indonesia’s
archipelago.
2. Reducing the dependency toward banks and other financial institution
on loan aspect only.
3. Helping SMEs client to gain access on load credit to grow their
business.
4. Starting connection to Banks toward distributing loan to borrowers in
the market.
2.2.3 Products and services

My First Capital offers a wide range of loan to customers, the customers here can
either a borrower or a lender. Before continuing to the product and service
description, an author mentions “The primary spell for business is differentiate by
innovating or vanish” (Sanders, 2011). A sentence mentioned by author earlier
has a deep meaning to entrepreneur especially for MFC management, therefore
before launching our platform to the customer, we had developed a variety of loan
with particular interest rate and return for lender. Certainly, the offers will suit our
desire market, which is Indonesian market.
2.2.4 Positioning
The final step of building marketing strategy is positioning, Lamb (2012) defines
positioning as “how company or organization influence overall perception of
customers toward brand, products or services and organization”. Therefore,
establishing the best-fit positioning for MFC is essential to grow and sustain in
competitive market even more this industry is new in Indonesian market. MFC
offers range of loan type to the market, but first stage is gaining money from
lenders then MFC can distribute the money to the borrowers who apply loan on
the website. To attract lenders coming to join MFC, we set the return higher than
banks offer while set the interest rate lower than banks offer to borrowers. Below
is the positioning map of MFC:
16
Figure 6
My First Capital Positioning
Speedy Service
Interest rate and return competitiveness
Source: Created by author
The positioning maps above shows that My First Capital stands on the top right
hand side of the maps, meaning that My first Capital will offer competitive
interest rate and return for the customer as well as serve the customer quickly.
This should become an offer that match customers need and demand.
2.2.5 Scale and growth anticipation

My First Capital is not only targeting Small-medium enterprises (SMEs) but also
citizens living in Indonesia. The growth anticipation should be relying on the
number of SMEs and the credit cover by Banks and other financial institution. As
it mentioned earlier, there are at least 50 million SMEs out of 263 million citizens
in Indonesia and based on the Ministry of communication and technology data in
2015, less than 40% of SMEs loans are covered by Banks. Take a look at below
table for our scale and growth anticipation
17
Table 1:
Scale and Growth Anticipation
Year Growth Expected Expected Average per
factor (5% SMEs in SMEs for day visiting
per year) in Indonesia MFC customers
million
Year 1 3 50 204,400 560
Year 2 3.5 52.5 292,000 800
Year 3 4 55.1 365,000 1000
Year 4 4.6 58 531,805 1457
Year 5 5 61 780,005 2137
2.3 Business Model

This section is the continuation of business model on chapter 1. First, both lenders
and borrowers connect to MFC platform to either lending or borrowing money
which start when a borrower applies for a loan and lender on the other side, agrees
for such amount of loan (the lender could be more than one people). Then MFC
informs the partner bank telling the borrower is verified and bound to terms and
regulations.
Essentially, bank is those providing credit to borrower and issues the advance note
to lender by means of MFC. Next lender transfers the to MFC, at that point we
buy the advance note utilizing lender’s money to accomplice bank. Following this
step, partner bank issues loan note to lender through MFC platform and finally,
borrower will repay the debt to lender via MFC platform. Abraham and Zhang
(2009) expressed “P2P lending platform model allows borrowers to gain
relatively lower interest rate and lenders are likely getting higher return assuming
no performing loan is not occurred”. In order to get more understanding toward
18
the business model of P2P lending platform, below is the figure of how P2P
lending platform work:
Figure 7
P2P Lending Platform Business Model
Source: Bakker
19
Chapter 3: Feasibility
3.1 Market Research Methodology

3.1.1 Defining the research problem
(a) Problem Formulation

P2P lending platform word is a new matter in Indonesia, many Indonesian barely
heard the P2P lending platform term despite the majority of western citizens are
familiar with this designation. The main function of problem formulation is to
clarify the issues faced by the venture and find solution for each problem. To ease
the process, breaking down the problems with 5 “W” can be useful for this matter:
1. What: According to report issued by Oliver Wyman (2016) it said “only
one percent out of 57 million SMEs have the ability to survive and create
over their industry due narrow space to business credit”. Establishing P2P
lending platform enable SMEs to have access on credit loan as well as
helping general borrowers and lenders.
2. When: This issue occurred during year before 2016, therefore its a fresh
year to start a P2P lending platform as the industry starts to develop and
have a decent projection for year 2017. (UBS Evidence Lab, 2016)
3. Where: Indonesian financial industry in specific experience a global crisis
which make this problem happened.
4. Why: Fixing this problem enable SMEs to grow and citizens in general
can receive the benefits.
5. Who: Indonesian Bank and other financial institution in Indonesia
experienced global crisis so that they unable to grant a credit easily. There
are many procedure prior granting a loan.
(b) Aim of the current market research

To classify and identify the target market, product and service, in order to come
up with strategy and approach to satisfy the customer needs and wants.
20
3.1.2 Design for the market research
This business development plan is equipped with research methodology in order
to find out whether this business idea is relevant or not. “The main purpose of
research methodology is to solve the research question” (Kumar, 2008), the
research question of this BDP is whether this proposed business development will
be succeeding in the market or failed. There are many approach of design for the
market research which consist of Descriptive, Exploratory, Qualitative, and
Quantitative. The suitable approach in constructing proper business plan should
be exploratory research and market segmentation analysis.
• Exploratory research utilized to find out the circumstantial data such as
number of SMEs, loan coverage by banks, P2P lending platform and other
financial institution. The data found is used to determine and look for the
demand for the product/service.
• Market segmentation used to analyze the potential customer in 5 different
segmentation strategy; demographic segmentation, geographic, behavioral,
psychographic, and price segmentation.
3.1.3 Information types and sources that are required

The secondary is the only type of data incorporated in this BDP which obtained
from books, websites, journals, business research data, articles and other sources
of secondary data. There is no single primary data in this BDP, therefore no
questionnaire, interview, and field observation are conducted for the purpose of
this BDP.
3.1.4 Proposed methods of data analysis

Researchers do not only need to know how to conduct, collect, analyse, and
discuss the data but also “understand the unique and distinctive data as an
essential key in completing the research” (Olsen, 2011). Furthermore, this BDP
will be using descriptive research which consist of quantitative and qualitative
data. “Observing the particular phenomenon or case with going through statistical
measurement is definition of quantitative research” (Given, 2009) while
21
“qualitative method focuses on natural aspect of the phenomenon without using
any mathematical or statistical method” (Kothari, 2014). Both approaches will be
utilized to assist this BDP in improving the research on relevant and related
issues.
3.1.5 Formulation of finding

The outcome of the market research should inform us about the suitable product
or service that likely be bought by our target market, the appropriate pricing
strategy should follow the result of the market research and our marketing strategy
without a doubt is working under the market research outcome. To sum up, the
conclusion of market research is tested and calculated on organizational and
financial feasibility, strategic analysis, and resource availability.
3.1.6 Ethic issues

As mentioned earlier in chapter 3.1.3 that secondary data represent 100 percent of
data usage and it is not necessary to gain the ethics approval as author has
declared in the ethics form that no primary data used in this BDP.
3.2 Market Research and Product Service
Bradley (2013) states “Market research allow a company to look for the customers
who are likely to make a purchase the products or services offered by the
company”. Market research start with collecting the required data, analyze, test
the product tor service company offered and evaluate the outcome. On the early
stage, entrepreneur not only required to conduct the research toward the market
but also to investigate the industry potentials and drawbacks. These include
knowing the rival within the industry, regulation, and the dynamic of market.
“Finding the appropriate, precise, and relevant information and data in the market
is necessary to create a fundamental platform and sustainable strategy for the
company” (Brown et, al, 2008). Segmentation, targeting, positioning and other
22
marketing strategy and approach can not be done if an appropriate market
research does not occurred.
3.2.1 Exploratory research
Descriptive and causal analysis backed this business development plan for the
sake of finding statics and real data which publicly available for everybody. The
main purpose of this approach is discovering the gap in the market while the duty
for quantitative research is finding the market in the gap. This business
development is relying on secondary data and there will be no primary data used
as it declared on ethics form that primary data will be excluded from this business
development plan. The objective of using secondary data is to find relevant
information to support this project. Vartanian (2010) describes “secondary data as
information or data which have been found or issued and been studied by other
people in the past”.
Generally, secondary data is available publicly and can be accessed by anyone.

The type of secondary data used will come from the journal, report, books,
scientific paper, newspaper and other type of secondary as long as the data
obtained is verified and trusted. Although using only secondary data only is not
complete without using primary data, we obviate it due to limited time available
to finish the business development plan. Thence, the report and journal from
reliable source such as McKinsey, Harvard Business Review, Deloitte, E&Y,
KPMG, Boston Consulting will be included in this report to minimize the
deficiency of not enclosing primary data.
Obtaining secondary data for P2P lending is not really easy as this industry just
found in 2005 while Indonesia as our target market experienced P2P lending
platform in 2013. Fortunately, lot of professional service companies issued their
reports upon P2P lending platform. Those data could be the basic element of
industry or market analysis for MFC. HBR in its journal said that “P2P financial
systems are ready to disturb banking industry to follow what has occurred in
media industry” (Stalnaker, 2008). But, we contend that MFC will not going face
to face with banks rather building partnership and coordination with them. P2P
23
lending is a new industry in Indonesia and citizens are not well-educated about it
and we think partnering with banks will be beneficial for us.
PWC (2015) reveals “P2P lending platform distribute the loan for £4.27 billion in
2014 and predicted to achieve £116 billion in 2025 in US only”. The development
of Fintech especially P2P lending platform is high in developed while Indonesia
as reported by Jakarta Post (2016) “Indonesia inhabited by 263 million people
will attain high growth in P2P lending and there are still a lot of opportunity for
industry to develop quickly”. Before jumping to Indonesian market, lets observe
the report issued by s in Global Financial Development Report (2014)
“A lot of people in developing countries have limited access to gain credit from
bank and other financial institution while people from developed countries
relatively posses easier access to credit”. Even though the reasons to borrow
money in developing countries are important, still many banks limit this.
Figure 8
Reasons for Loans in Developing Countries
Source: World Bank
Emergency situations and health are the main reason why people borrow money
in developing countries, followed by school fees and home construction on the
24
second position. Funeral/weddings ranked last in this survey. Indonesia is one of
the developing countries in the world and citizens still face the limited access on
gaining loan. Thence, we answer might be the other form apart from bank and
other financial institution who is able to assist citizens in Indonesia. Take a look at
below graph about P2P lending development in the world;
Figure 9
P2P Lending Growth
Source: Investee
Developed countries and China experienced the P2P lending growth from 2010 to
2014, the total of loan issuance is varied between countries, but during that the
percentage rose about 123% which highlighting the growth of P2P lending
platform is high and promising. How about Indonesia? Extracted from the
Ministry of information and technology of Indonesian republic (2016),
“approximately about £11 billion or equivalent to 0,6% of global transaction has
been made in Indonesia for 2016 period”. This number is still far from the ideal
number as we know that Indonesian market is huge and it GDP is the highest
among Southeast Asian countries. To get a clearer picture of the Indonesian
position in global market, below is the picture:
25
Figure 10
Indonesia’s Position in Global Market
Source: Ministry of Information and Technology of Indonesian Republic
Translated from the figure, UK itself in 2016 made about £125 billion of nominal
transaction and £1,987 billion of transaction per population. While U.S achieved
£585 billion of nominal transaction and £1,836 billion of nominal transaction.
Singapore as the best Southeast Asian country in term of P2P lending, scored
£8.09 of nominal transaction and £1,479 billion of transaction per population. The
Singapore figure is close behind Indonesian regarding nominal transaction but it
far away behind Singapore’s transaction per population. Despite all the facts
mentioned above, Indonesian market has immense market potential that can be
explored and exploit for the development of P2P lending platform. “There are
four factors to reveal that Indonesia is a big economy with large and potential
consumers” (KOMINFO, 2016).
26
1. Total population of Indonesian is number four in the world whereby 17,3
million households are middleclass and expected to exceed 20 million by
2030.
2. Gross Income Per-Capita increase from £430 to £2,770 in 2016.
3. Number ten across the globe in purchasing power.
4. Member of G20 who is able to deduct the poverty rate by half within 15
years’ period to achieve 11.2% of total population.
Figure 11
Top Five Emerging Market with The Best Middle Class Potential 2015-2030
Source: KOMINFO
The above projection has clearly described the position of middle income class
during 2015 to 2030. The median income real growth increase by 80% while the
median income will be at more or less £9,159 in 2030.
Apart from the rising number of middle class income of Indonesian, Indonesia
will experience shift in demographic structure where generation Y and Z filling
the workforce. The P2P platform especially and digital industry in general will
gain advantage from this shift. Extracted from the McKinsey (2016) research on
this demographic shift, below are the benefits from this case:
27
1. Both generation Y and Z are digital system users and mostly depend on
the I.T.
2. Gadget, Smartphone and other sophisticated technology are common for
those generations.
3. Text message, social media, and hand-held communication tools are
utilized by those generations for communication media.
4. Their preference communication method is online and mobile as well as
Face time.
5. These are the most important demographic shift upon those generations,
they are likely to decide on financial matters face to face and digitally
crowd-sourced solution.
Reason number 5 is the most important fact to support the P2P lending
development, the market will show full potential by exploiting on this case. When
market demand solution for financial digitally, P2P lending offers lots of solution
for them. However, the products and services created by the platforms must attract
the customers, otherwise banks will remain as the major player in loan industry.
Therefore, MFC needs to find and create strong and attractive offer to the market
as we know these generations are aware and rely on technology to compare and
review our products and services. If they do not feel satisfy toward our brand, they
might easily shift to competitors who they consider are better than us. This market
and industry research are helping us to find out the facts in order to come up with
products and service that meet market preferences.
Analyzing the financing space is essential for P2P lending platform, MFC
management will know how we can compete with banks who basically have more
resources and better brand image than MFC. Below is the amount of banks user:
28
Figure 12
Number of Indonesian Having an Account at Formal Financial Institution
Source: World Bank
Only 36% of Indonesian adult having an account at Banks or other financial

institution. Generally, 64% citizens who do not have an account show how much
market potential for P2P lending platform to work on that space without even
touch the banks market. Moreover, 65,23% of Gross Domestic Product (GDP)
financing are not coming from banks loan, instead coming from another sources
of financing. This number reflects just how much potential and growth of
financing space in Indonesia. In fact, we do not even not to confront with banking
industry to get a customer due to the fact banks themselves unable to dominate the
financing market.
Figure 13
Source of GDP Financing (Q4-2015) in Indonesia
Source: Ministry of Information and Technology of Indonesian Republic
29
3.2.2 Company’s competitors
Knowing the competitors within the industry bring many benefits to our venture,
Berkowitz (2008) “assessing competitor’s strengths and weaknesses allow
company to construct better strategies to compete within the market”. Essentially,
the competitor analysis leads us to have offensive and defensive strategy as to
attack or counter attack the competitor’s strategy. Below is the table of MFC’s
Competitors:
Table 2
MFC’s Competitors
KoinWorks Investree
Strengths Strengths
• First P2P Lending Platform in • Lenders are able to choose to
Indonesia whom they lend the money for
• The competitive return to • Easy entry for both borrowers
lenders up to 38% EAR and lender
Weaknesses Weaknesses
• Does not have strong risk • No loan with security product
diversification portfolio • The type of loans are limited
• No loan with security product
ModalKu Crowdo
Strengths Strength
• Invested by big financial • Investors around the globe are
institution welcome
• Targeting Small-medium • Have a lot of operation area in
enterprises South-east Asia
Weaknesses Weaknesses
• No loan with security product • No loan with security product
• Do not have local bank partner • No local bank partnership
30
3.2.3 Market accessibility
The market is said accessible on factors such as competition, barriers to entry,
distance to customer and delivery access;
• Competition should not disturb the growth of our venture as the indication
is low and under control
• The barriers to entry is quite low as it requires less investment, regulations
are covered under certain law although the regulation specifically made for
P2P lending platform is not been made yet
• Distance is the least to concern due to the fact MFC rely on website as a
medium of business
3.2.4 Market Segmentation

“Businesses utilize the modern pillar of marketing strategy which are
Segmentation, targeting, and positioning” (Proctor, 2014). In current business era,
businesses required to think different approach to tailored their product and
service in order to meet the demand of customers in the market. McDonald and
Dunbar (2012) defines “segmentation as an action to separate markets into group
of potential customers who posses similar need and are likely having similar
purchase characteristic”. Segmentation is considered as the main factor of
marketing planning tools and fundamental idea for MFC to implement suitable
strategy. The very basic goal of segmentation is to look for the gap in the market
or niche opportunity and to understand who MFC customers are, what kind of
product or service that able to satisfy them as well as maintaining decent
relationship in the future. There are four approach used to conduct the
segmentation, geographic and demographic. Below is the table of My First
Capital segmentation:
31
Table 3
My First Capital Segmentation
Segmentation Description Segments
type
Geographic Country SMEs living in Indonesia
Citizens living in Indonesia
Demographic Gender Both gender

Occupation Professional Semi-professional
Self-employed Trader
Businessman Student
Income Under £10,000
£10,000 - £15,000
£15,000 - £25,000
Behavioural Benefit Competitiveness
sought Convenience
Psychographic SMEs Survivors and Achievers
General Survivors, experiencers, and something better

citizen
Based on the above table, we target anybody living in Indonesia but especially
Small-medium enterprises who need capital to sustain or expand their business.
Both gender is welcome to MFC and basically every occupation can access the
MFC service as long as they have salary or other source of income. Customers are
likely to opt for MFC based on our competitiveness and convenience services and
32
products. Finally, SMEs seek for better source of financing to survive, experience
something new and better for them. Below is the segmentation of our customers:
Figure 14
Segmentation of customers
Vehicle loan
Educational loan
Any occupation
with salary or other
General citizens source of income
House repairment
Indonesian
General loan
Revenue above To grow and

£50,000 expand
SMEs
Revenue below Either sustain or
£50,000 per year expansion
3.2.5 Identification of the business opportunity – product/service

• Gap in the market – By completing the exploratory research, we found out
that the demand toward P2P lending platform is genuinely raising and
Indonesia could be the largest market of financial technology in Southeast
Asia
• Market in the gap – Using both market segmentation mechanism and
analyzing reachability to customers, SMEs, and general citizens. Those
target market are demanding the service and product offered by P2P
lending platform
33
3.2.6 Description of product/service
Table 4
Variety of Loan Available
Loan Type Interest Rate Return Rate (Lender)
(Borrower)
General Loan 15-20% APR 13-17%APR
Debt Consolidation • Loan at 15-20% • Loan at 13-17%
p.a. p.a.
• Overdraft at 16- • Overdraft at 14-
20% p.a. 17% p.a.
• Credit Card at • Credit Card at
17-21% p.a. 15-19% p.a.
Home Improvement 14-19% p.a. 12-17% p.a.
Vehicle Finance 15-20% p.a. 13-17% p.a.

Wedding 15-19% p.a. 13-16% p.a.
SMEs Loan 13-20% p.a. 11-18% p.a.

Tuition 13-18% p.a. 11-16% p.a.
The above table shows the type of loan available on My First Capital, in order
distribute the money to borrowers, we need to attract lenders to join and put their
money to the platform. Hence, the rates offer to both borrowers and lenders are
lower than banks and other financial institution offer. Going to general loan
offered by MFC. It ranges from 15 to 19% p.a. for borrowers and 13-17% p.a. for
lenders, the rates apply base on how much loan granted to borrowers and duration
of the loan while lenders gaining their return base on amount of lending money
and the investment span. Other loan types are implementing the same terms and
conditions as to general loan. The most important element of the loan offered are
the speedy service and competitive interest rate and return.
34
3.3 Industry and Competition
3.3.1 Product life Cycle

The key point on how to manage business marketing is knowing the product life
cycle. “This idea helps companies to know their current and future position as
well as to build suitable strategy for them” (Stark, 2015). The concept describes
the condition in four different phases in which each phase has specific description
and every phases need different treatment. Below is the figure of MFC product
life cycle:
Figure 15
My First Capital Product Life Cycle
• Introduction – The new venture will be located in the capital city

whereby 10 millions of people live. Generally, the main office located at
South Jakarta only serve as the work and server location, representative
office to gather a meeting, and as a headquarter while to promote our
business, we advertise through digital marketing where there is a lot of
visitor. Search Engine Optimization (SEO), Pay Per Click (PPC) adverts,
35
social media and massive offline promotion will be held during the
introduction phase.
• Growth – this phase reflects with the rise of sales and the use of
marketing and promotion will pay off, choosing the right marketing
method at this stage is essential to keep the sales grow and develop. More
customers experience the product and service and many of them become
loyal toward our brand if they are well-served and satisfy with the offers.
• Maturity – The sales reach the top and maximum potential customers
have been reached. The sales are likely to remain the same and there will
be no big increase on sales. “Its either management to invest more in
marketing to keep the sales stable or cut the marketing cost and receive
less profit in return” (Giordano et, al, 2012). The final action could be
prolonging the maturity phase by doing product extensions.
• Decline – Every companies face decline stage at the end, shown by drop in
the sales and less profit will be reaped. “Product development,
diversification, market penetration, and market development can be
utilized to extend the product life cycle” (Kenny, 2009).
3.4 Organizational Feasibility

This chapter describes the possibility of running the business from the
management and organizational competence point of view. The explanation is
breaking in bullet point below:
• Promoters’ passion and motivation – The owner in this case is really
enthusiast on working P2P lending platform in Indonesia. The fact that he
is taking business degree and have been working on company allow him
and partners to work on this new venture
• Understanding the market - The owner of this future company has
conducted the market research and was born in Jakarta, Indonesia. He is
knowing the condition and situation at Indonesia. Beside, he himself has
done the market research and knew the factual and essential data
36
• Business structure – As the venture capital coming from families, the
business structure should be sole proprietorship and it is not impossible to
change the business structure later on to limited company or joint-venture
whenever the business is growing
• Personnel availability – Indonesia consist of 260 million people with 130
million workforces, the personnel needed for venture is widely available
across the archipelago. Marketing staff and I.T employee are important
personnel to be filled in MFC
• Principles and practice of the business – We are in line with the anti-
discrimination on the work and practice good manner practice. Our
potential employee should be trained and inducted toward company’s
value and positive habit.
Figure 16
Organizational structure
CEO
Marketing Manager Chief accountant

I.T Manager Customer
Services
Marketing Officer
Accountant
37
3.5 Financial Feasibility
Financial projections including new-venture capital, MFC initial expenses, sales

projections, depreciation, income statement, cash flow projections, payback
period, and break even estimation will be shown in this chapter.
Estimation of sales buildup

The result of the market research is really beneficial to know what drive the sales
to grow. The small-medium enterprises are our target market and followed by
general citizens. We predicted we reach 16,800 potential customer visit our
website in the first month and at least 25% of them become either borrowers or
lenders in our platform. We aim to provide loan for SMEs due to the fact that they
have the business running and suppose the repayment would not be hard.
3.5.1 New-Venture capital of My First Capital

The initial capital coming from the founder of My First Capital, Kemal Ashshidiqi
and His Parents, Dr. Mizwar Nur and Asmida Martum. Both parties agreed to
invest in MFC for IDR 8,000,000,000 or equivalent to £466,720. The money
collected will be funding initial investment and expected to finance operating cost.
Table 5
New-Venture Capital
GBP
Investor Investment
Kemal Ashshidiqi £116,680
Dr. Mizwar Nur £175,020
Asmida Martum £175,020
Liabilities
Short-term liabilities -
Long-term liabilities -
Total Liabilities -
Total Shareholder Fund + Liabilities £466,720
38
3.5.2 MFC initial expenses
Table 6
Initial Expenses
Expenses GBP
New Business Legal Requirement £2,870
Office Rent £60,215
Office Interior Design £20,091
Marketing Program £28,701
Administration Expenses £2,870
Insurance £1,435
Website Establishment £57,403
Stationary £1,435
Total Expenses £175,020
Initial Investment – Initial Expenses £291,700
The money collected from the initial investment will be used to fund the new
venture requirement such as permit, office rent, marketing program and others.
The total amount spent on the initial investment will be IDR 3 billion or £175,020
while the rest of the money invested in this venture should be enough to pay for
operating cost for a 3-year period.
3.5.3 Sales projections

Basically, of My First Capital will be reaping profit from two sources, origination
fees and servicing fees. Origination fees are a charge to initiate the loan, fill the
paperwork, get the loan completed and distributed while servicing fees are duty
that charge monthly during the loan period.
39
Table 7
Sales Projections
Sales Projections Year 1 Year 2 Year 3 Year 4 Year 5
Origination Fees £86,688 £100,000 £120,032 £126,704 £196,712
Servicing Fees £100,000 £133,360 £160,000 £200,000 £200,000
Total Sales £186,688 £233,360 £280,032 £326,704 £396,712
Figure 17
The table and figure show above have clearly state the sales projection of MFC.
Origination fees and servicing fees both contribute to the sales since the first year
with £110,00 and £140,000, respectively. The Servicing fees will rise in year 2
and increase significantly in the third year while the origination fees also supply
decent sales although the figure will not as high as the servicing fees. All of this
could be happen due to marketing activities involve in the process.
40
3.5.4 Depreciation
Table 8
Depreciation
List of Asset Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Office Furniture £8,587 £7,728 £6,955 £6,259 £5,633 £5,069
Office £14,311 £12,879 £11,591 £10,431 £9,387 £8,448
Equipment
Total Book £22,898 £20,607 £18,552 £16,690 £15,020 £13,517
Values
Both Office furniture and office equipment depreciated at 10% straight each year
from year 1 to year 5. Office furniture consist of tables, chairs, boards, stationary
and others while office equipment contain computers, server and other electronic
equipment and devices.
3.5.5 Income statement

“Income statement also knows as profit and loss statement that reveals company’s
financial performance for a certain period” (Porter and Norton, 2016). Elements
available in the report are revenues, expenses and finally net profit/loss. Let’s
take a look at the MFC income statement below:
41
Table 9
Income Statement
Income Statement Year 1 Year 2 Year 3 Year 4 Year 5

Revenue £186,688 £233,360 £280,032 £326,704 £396,712
Cost of goods sold / £18,668 £23,336 £28,003 £32,670 £39,671
cost of revenue
Gross Profit £168,020 £210,024 £252,029 £294,034 £357,041
Expenses
Website maintenance £13,000 £15,000 £18,000 £25,000 £28,876
Server maintenance £25,000 £30,000 £33,000 £38,000 £41,000
Rent £30,107 £30,107 £30,107 £30,107 £30,107
General Expenses £13,662 £14,682 £16,849 £15,000 £17,000

Depreciation £20,607 £18,552 £16,690 £15,020 £13,517
Bills and Electricity £7,500 £8,500 £10,250 £11,000 £12,000
Wages £46,714 £51,409 £55,434 £58,173 £62,000
Total Expenses £156,500 £168,250 £180,330 £192,300 £204,500
Profit Before Tax £11,520 £41,774 £71,699 £101,734 £152,541
Profit After Tax £9,216 £33,419 £57,359 £81,387 £122,032

(Tax at 20%)
Transfer to reserves £9,216 £33,419 £57,359 £81,387 £122,032
Net Profit Margin 4.93% 14.3% 20.4% 25% 30.7%
The Cost of revenues are capped at 10% flat for the whole period while website
and sever and maintenance are getting higher year by year due to the customer’s
increase. The rent is paid for 5-year contract therefore there will be no change
within 5 years. Depreciation is counted every year while the bills and electricity
getting higher due to the fact more employees coming. Wages expenses consume
42
lot of MFC expenses as it relevant that revenues are also rising. The net profit will
be transferred to reserve for expansion and keeping operating cost under control.
3.5.6 Cash flow projections

Cash flow is cycle of cash within a company, MFC need to manage its cash flow
carefully to put the company on track while avoiding cash flow flow problem.
Fight (2005) expresses “cash flow is crucial to analyse potential problem which
enable to disturb company’s operation”. Expert are able to judge whether a
company is managing its business well or not by looking at the cash flow.
Table 10
Cash Flow Projections
Pro Forma Cash Year 1 Year 2 Year 3 Year 4 Year 5
Flow
Cash Sales £186,688 £233,360 £280,032 £326,704 396,712
Total Cash From £186,688 £233,360 £280,032 £326,704 396,712
Operations
Additional Cash
Received
Cash From £291,700 - - - -
Investment
Subtotal Cash £478,388 £233,360 £280,032 £326,704 396,712
Received
Expenditure
Cash Spending £156,500 £168,250 £180,330 £192,300 £204,500
Bill Payment £10,000 £12,000 £13,500 £15,000 £16,000
Subtotal Spent on £166,500 £180,250 £193,830 £207,000 220,500
Operations
Net Cash Flow £311,888 £53,110 £86,202 £119,704 £176,212
Cash Balance £311,888 £364,998 £451,200 £570,904 £747,116
43
We observe the figure from year 1 to year 5 above then we conclude that the
number of cash balance is always increase every year due to increase in cash
inflow while maintaining the moderately low cash outflow. Considering the
amount of cash MFC has, we believe that this company is healthy and does not
have problem with liquidity and operational cost.
3.5.7 Payback period

Chandra (2008) defines “the duration of time needed to cover the cost of
investment”. Payback period is the key of investor to decide whether to execute
the position or project. The transparent result of payback period must be clear in
order to satisfy both parties.
Table 11
Payback Period
Year Cash Flow Cumulative Cash Flow
0 (£175,050) (£175,050)
1 £20,188 (£154,862)
2 £53,110 (£101,352)
3 £86,202 (£15,150)
4 £119,704 £104,554
5 £176,212 £280,766
Payback period of My First Capital:

= 3 + (-15,150/119,704)
= 3 + (15,150/119,704)
= 3.12 or equal to 3 years and 1 month
3.5.8 Break even analysis

“Breakeven is a point whereby company’s cost match the amount of sales
quantity which mean the company does not incur loss or profit” (Cafferky, 2010).
44
This financial feasibility section is equipped with breakeven analysis to picture
when does MFC achieve its capital back. Below is the chart and table of break
even analysis for My First Capital:
Figure 17
Break Even Analysis
Table 12
Break Even Analysis
Year Fixed Cost Contribution Profit
1 £204,190 £134,182 £169,186
2 £204,190 £163,352 £198,356
3 £204,190 £210,024 £245,028
4 £204,190 £256,696 £291,700

5 £204,190 £268,364 £350,040
45
3.5.9 Risk Evaluation
Suppose if the repayment from the borrowers are clear and smooth, there will be
no problem regarding financial condition. To minimize the risk of no performing
loan, we build cooperation with debt collector to inform and collect the
borrowers’ debt. This need to be done to ensure the business running well.
3.6 Resource Sufficiency
Barnett and Morse (2013) express “businesses have to ensure the sufficiency of
their resource to run the business, otherwise the business might stop on the middle
of process”. Therefore, MFC need to analyze its resources to meet the
requirement to run the P2P lending business.
• Financial – The money gain from investment should cover the initial
expenses and finance the operating cost for the year listed in the financial
feasibility section. It is unlikely the business stop on the process due to
enough financial resource available
• Technical – Our website carries big responsibility as it become the
medium or connector between MFC and customers apart from digital
marketing that we do. We invest quite a huge amount on website
establishment to ensure no future problem coming from technical issues
• Human – More than 100 million workforces with different background
and abilities are available in Indonesia. Hence, only a short training
session is conducted for new employees
• Physical - We rented an office space in one of the busiest area in Jakarta
to accommodate employees or people having a business with us find it
easy to arrive at our office. The rent amount is covered by the investment
given by the investor
• Organizational – The ownership is based on the mutual agreement with the
families while the technical, human, and technical are work under the
contract.
46
Chapter 4: Strategic Analysis and Business Model
“Strategic analysis involves in conducting research on business environment

internally and externally in order to construct strategy” (Afuah, 2014). Goals of
using the designed strategy are to create value offered to customer and to ensure
that MFC is ready to gain advantage of the industry to achieve organizational
objectives, Thomson and Martin (2010) infer “companies should prepare
strategies to deal in any kind of business situation”. Not only the strategies are
used to change or fix organization performance but also to assure company going
in proper track even in atrocious situation. Thence, conceive strategies and
implement them well are important for MFC in this early stage of the business to
grow and expand as well as to prepare company from incoming future.
4.1 Internal Environment Analysis of My First Capital
Internal environment analysis refers to analyze and appraise organization

internally in order to figure out organization’s strengths and weaknesses. Hitt et,
al (2006) opine “internal analysis begins with pint point and evaluate available
resources, organizational proficiencies, and defined competencies”. Company
have to make clear finding toward their resources, capabilities and competences in
order to achieve the ultimate goal of internal analysis as Hitt et, al (2006) states
“The importance of internal analysis is to create decent strategic decision for the
company”. Therefore, MFC is building appropriate and suitable strategic decision
by harnessing internal environment analysis.
4.1.1 SWOT analysis (strengths and weaknesses)

SWOT investigation is required to earn wide and compete conception of MFC,
strengths and weakness of the company are evaluated in this section where threats
and opportunities are revealed on external environment analysis on different
section. Kotler and Armstrong (2011) express SWOT allow companies to
determine internal and external situation by differentiating their strengths,
weaknesses, threats, and opportunities”. Furthermore, SWOT analysis assist
47
management to select the best-fit strategies that match company’s capabilities and
competencies. Below is the Strengths and weaknesses of MFC:
Table 13
SWOT Analysis
Strengths Weaknesses
• Provide more competitive • Maximum figure for each loan
interest rate for borrowers is £5,000
• Provide more competitive • There is no guarantee that
return rate for lenders borrowers repay the money
• Some loan type is insured and • The software, server, and
secured website establishment cost a
• Speedy service (2 to 5 days) lot of money
• No repayment fee (no fees • Expensive maintenance cost
applied when loan repay early)
• Allow online application
• Borrowers are strictly
reviewed by credit assessment
• Apply risk diversification
model to minimize risk
exposure
• Minimum investment for
lender on each loan is £30
We obviously provide more competitive interest rate and return for borrowers and
lenders due to the fact that we put the operational cost low, that allow us to
compete with other P2P lending platform and other similar portfolio. MFC not
only offer quick loan service but also equip loan insurance for several type of
loan. We do not apply penalty when borrower repay their debt early and online
loan application is allowed. MFC introduce risk diversification model to reduce
the risk for lender by distribute the investment to several borrowers, if one
48
borrower fails to repay the debt, other borrowers able to cover it. Last but not
least, borrowers are assessed by their credit score strictly to create supportive
marketplace environment.
On the other hand, MFC unable to afford loan for more than £5,000, borrowers
are suggested to take a loan from banks. There is no guarantee that borrowers
repay their debt and since no collateral included in the agreement, most of loan
type are unsecured. Another drawback of MFC is not only the expensive cost of
constructing server, software and website but also cost of maintenances are high.
4.1.2 Resource based view

Resource based view (RBV) is perceived as an approach to attain sustained
competitive advantage through company’s resources. Barney and Clark (2007)
define “RBV is divided into tangible and intangible asset, tangible resources
include Human, Financial and physical assets while intangible assets are
everything else which not having presence but able to be owned by organization”.
Reputation, track record, brand image are intangible assets, created over a long
term and unable to be acquired from the the market while tangible assets are
accessible in the market. Therefore, intangible assets provide more competitive
advantage than tangible assets as intangible assets are not easily copied. Below is
the figure of RBV:
Figure 18
Source: Strategic Management Insight

There are many requirements to achieve sustained competitive advantage,
Rothaermel (2016) says “even though for company own mixed and static
49
resources is essential to accomplish competitive advantage, those are not enough
to sustain it”. Later, he creates VRIO framework on how to build and sustain
competitive advantage:
1. Value – Do resources are valuable? It is a matter on how to convey value
offered to the customer.
2. Rarity – Do resources are rare? Competitive uniformity is a result when
competitors able to acquire the resources easily. Those resource unable to
be source of competitive advantage.
3. Inimitability – Do resources can be imitated, copied or substituted? Any
company which has achieved at least valuable and rare resource is able to
have provisional competitive advantage. Having inimitability resources
allow company to posses sustained competitive advantage.
4. Organization – Do organization ready to take advantage from the
resources? When the organization is ready to harness the value of
resources, it able to attain and sustain competitive advantage.
Turning to MFC assets, we need to classify which assets are referring to, tangible
assets consist of (1) office building at Beltway office park, Jakarta, (2) MFC
capital of £574,35, (3) Company’s website, (4) Employees, and (5) Furniture and
computers. Intangible assets include (1) Partnership with Several banks, (2)
Brand image, (3) Company’s risk diversification system. After assessing the
resource within organization, selecting which resources to sustain competitive
advantage is the next step. The selected resources who comply with VRIO
framework should be improved and applied in the company. Below is the VRIO
framework of My First Capital:
1. Value – MFC offer relatively lower interest rate for borrowers and higher
return for lenders. We are sure our rate is better than any current
competitor in Indonesia. To provide more comfort, this valuable offer
come with wide range of loan diversification to reduce risk expose for
lenders/investors such as a borrower unable repay the debt.
2. Rarity – Providing new offer such personal pension is never being done by
other P2P platforms in Indonesia as generally they do not have bank
50
partner who authorized by Indonesia Deposit Insurance Corporation
(LPS). MFC has partnership with several banks in Indonesia (explain on
chapter 5) in order to construct this offer to the market.
3. Inimitability - Partnering with banks allow MFC to create the most
valuable offering to customers such as become P2P lending platform
specializing in loans with security. Thence, customer who opt for
competitive interest rate /return and demand for loan with security should
select My First Capital rather than choose our competitors.
4. Organization – Supported by our MFC risk diversification model and
expert providing professional quality control. We are sure MFC is able to
harness its resources to acquire value from them. The valuable, rare, and
inimitability offers within company are likely to bring sustain competitive
advantage in the long-run.
4.1.3 Value chain

The idea of value chain is the same as RBV goal as to earn competitive advantage,
the model was invented by Michael Porter after realizing that SWOT analysis is
too simple for company’s seeking for competitive advantage. D’heur (2015)
defines “value chain describes the whole activities of organization starting from
manufacturing process up to delivering the product or service to the customer”.
Generally, organizational effectiveness and process affect the value delivered to
the customers. Thence, value chain helps MFC to create better value for customer
by improving organizational process, efficiency, and effectiveness. Bititchi and
Carrie (2013) state “Value chain consist of main activities and and support
activities”. Main activities include inbound logistic, operation, outbound logistic,
marketing and sales, and service while support activities carry procurement,
technology, HRM, and firm infrastructure.
51
Figure 19
Value Chain
Source: SM Study
1. Inbound Logistic – “This early stage is marked by collecting materials to

be used in production process” (Bruhn and Georgi, 2006). MFC as P2P
lending platform in financial industry has different approach. First,
management decide specific offers, what should be and not included in the
offer. Then the website manager and staff construct the website design and
interface that suit our market. After the website, server, and other
supporting technical activities complete, it is time to launch the platform
to the market.
2. Operations –. The operations activities begin whenever our marketing
activities succeed and attract potential customer to visit our website or call
our representative. Either borrower or lender checks the website to look
for the value offered by MFC. We provide lenders to finance borrowers
and if lenders agree with specified return and borrowers concede the
interest rate then the transaction occurred.
3. Outbound Logistic – After the deal has been occurred, we then contact our
partner bank to issue a loan note to lender, then lender give out cash to us
in order to purchase the loan note on behalf of the lender. Following this,
52
bank render the genuine loan to borrower while deliver the loan note to
lender. Finally, the borrower repays the loan to lender through My First
Capital.
4. Marketing and Sales – “The fact that Indonesian consist of 263 million
and a country with the most internet users” (Internet society, 2016). We
believe using digital marketing as the most effective method to reach our
target market. The use of search engine optimization, pay per click advert,
and social media are encouraged. Not only they enable to cover target
market effectively but also the cost of harnessing digital marketing is
cheaper than conventional way.
5. Service – To conclude company’s objective as to present excellent service,
our representative has been trained and taught to handle and care our
customers. Providing the best solutions and patiently answer potential
issues and complains in order to maintain our service excellence.
6. Procurement – Partnering with banks not only allow us to obtain loan with
security to be offered for our customers but also grant our pension product
to be included in our offer.
7. Technology – Our peer to peer lending start-up is based on technology,
server to connect and ensure our operation running well is available.
However, the maintenance aspect might cost a lot, but also it is our source
of ensuring operation well.
8. HRM – Prior hiring our employee, we set up recruitment process in order
to meet the best available employee. Begin with screening the C.V and
select the potential employee, then we conduct the interview and test for
the candidates. The most suitable employees will be hired to be put in
probation.
9. First Infrastructure – An office at Beltway office park is chosen to be our
headquarter with server, computers and meeting room inside. Furniture
and office equipment are available to support company’s activities.
53
4.2 External Environment Analysis
Business world is moving dynamically year by year and businesses have to adapt
to change, otherwise they might be loosing the battle in this tight competition.
After dealing with internal analysis, management requires to asses the external
environment. Ireland et, al (2012) define external environment analysis is an
analysis of past, current, and future situation of business environment in order to
comprehend the competitors, what market wants, and how to design suitable
strategies to achieve organizational goals”. MFC is determined to combine the
results of internal and external environment analysis to create and implement
strategies for the sake of organizational visions and missions.
4.2.1 SWOT (opportunities and threats)

SWOT analysis definition has been mentioned on previous section (refer to 4.1.1),
Opportunities and threats are the elements of SWOT to cover the external
environment analysis. “Opportunities refer to external situation of business
environment that can be utilized while threats refer to external business
environment which might disrupt the company” (Pahl and Richter, 2009). The
result of opportunities and threats analysis are becoming the matter in forming
strategies for MFC, below is the opportunities and threats analysis:
Table 14
My First Capital Opportunities and Threats
Opportunities Threats
• The demographic shift to • No regulation made over P2P
generation Y and Z lending platform yet
• There is much financing space • Banks typically own bigger
• Indonesian government resource and can easily come
encourage the financial up with similar offers
technology start-up to flourish
54
Generations Y and Z are aware of technology and essentially they find out the
financial solution through online. This phenomenon should support MFC as the
website is our main medium of operation. Only less than 50% of loans are
financed by banks and other financial institution while the rest of the figure is
covered by other source of financing, mostly its illegal money lender causing
massive problem to the borrowers. This big hole is able to be covered by MFC as
it has wide reachability and accessible across Indonesia. On the other hand, no
regulation or policy has been created over P2P lending platform and the biggest
threat coming from big player such as banks who are able to copied similar offer.
4.2.2 PESTLE analysis

External environment analysis need to be done in order to establish strategies,
PESTLE analysis in one of external environment tool that’s going to be used by
MFC. PESTLE is an abbreviation of political, economic, technology, legal, and
environment. Abbot (2015) express “PESTLE analysis is a business tool used to
assess the macro environment affecting the company, businesses utilize PESTLE
either for establishing new strategies or adjusting them”. MFC conducts PESTLE
analysis base on geographical whereby the assessment must be referring to
condition and situation in Indonesia. The appraisal has to address; (1) the political
situation of Indonesia, (2) the general economic elements, (3) the degree of
culture and tradition affecting the market, (4) the potential technology that might
be applied in the market as well as it effects, (5) does Indonesian government has
regulated P2P lending platform yet? and (6) does environmental be a concerned?
• Political – Indonesian government concerns a lot about political stability

in order to maintain safety and supportive business environment. Many
potential disruptions have been cancelled and handled well, from separatist
movement, terrorism to money laundering are able to be taken care by
government. The latest achievement is the success of “government to be
out of FATF blacklist, meaning Indonesian government is taking seriously
of money laundering and terrorist financing” (Trianita, 2015). Therefore,
political situation is supporting MFC to launch in Indonesia.
55
• Economic – “Year 2015 experienced economic slowdown after reaching
its best on year 2010 with 6.81% economic growth. The economic was
only grew for 4.79%” (Indonesia-investments, 2015). The Asian
Development Bank (ADB) predicted “Indonesian economic should grow
better in 2016 by 5.2% due to solid public investment” (ADB, 2016). Year
2016 not only saw a strengthening Rupiah but also a decrease in poverty
rate, the GINI index was 0.41 in 2013. The fact that economic condition is
getting better in 2016 and projected to grow bigger in 2017 might become
a grip in launching MFC in 2016.
• Social – As mentioned earlier, Indonesian population reach 260 million in
2016 and Jakarta alone consist of 10 million citizens. The working
population was 121.7 million with 5.9% unemployment, and the main
religion was Muslim. (UNDP, 2015). The middle income citizens are
predicted to be the majority by 2020, this phenomenon backing our
business portfolio for either borrowers and lenders joining our platform.
• Technology – Although the infrastructures are not equally distributed
throughout Indonesia. Indonesia was the fourth largest users of Facebook
and the biggest internet users in South-East Asia. Indonesia Investment
(2016) stated “Indonesia has 100 million internet users with 40%
penetration”. This fact is really bolster our P2P lending platform as it
needs internet connection to connect with MFC website.
• Legal – Currently, no regulations or policies have been made by
Indonesian government, the “government through its Ministry of
information and technology reveals that they are waiting for the citizen’s
response toward P2P lending platform” (Nordiansyah, 2016). Fintech
company especially P2P lending platform is bound to follow digital
transaction policy which has been issued years ago.
• Environmental – Indonesian government concerns with green
environment and campaigns have been conducting until today. MFC is
implementing eco-friendly working environment, using less energy and
recommend employees to use public transport to the office.
56
4.3 Blue Ocean Strategy as Business Strategy
Following “the internal and external environment analysis, choosing an approach

in conducting strategies is important for the business in order to create and sustain
competitive advantage” (Hill and Jones, 2008). In this case, MFC chooses blue
ocean strategy as mean of business strategy. Kim and Maruborgne discovered the
blue ocean strategy for the sake of achieving and maintain competitive advantage.
“Blue ocean focuses on looking for a gap or slit in the market and arise with
products and services that match customer’s preference to attain lower costs and
increase products or services demand by wiping out irrelevant offerings”. (Kim
and Maruborgne). Blue ocean strategy should be the best option for MFC as we
are new and pioneer in the market.
Figure 20
Blue Ocean Strategy
Source: Coschedule
Red ocean strategy is perceived as bloody with competition, compete in existing
markets, and shows slow or even idle growth while blue ocean is believed as
uncontested space, competition-free, and acquire a new demand.
57
To accomplish competitive advantage and preserve it, MFC has to follow blue
ocean strategy guidelines, avoid unimportant offerings and emerge with what
customers want toward products and services. There are 4 strategies to utilize blue
ocean strategy; Eliminate, Raise, Reduce, and Create.
• Eliminate – Offline marketing method should not be utilized in promotion
and marketing strategy, it costly and not suitable to reach our target
market. The used of offline marketing staff is going to be depleted.
• Raise - We are not only going to raise the maximum limit of loan so that
customers do not need to seek loan from Banks but also increasing our
credit assessment in order to reduce the risks of unperformed loan. A wide
variety of loan is available such as general loan, tuition loan, home
improvement, vehicles loan, and vacation loan.
• Reduce – Number of staff needed will be reduced to maintain lower
operational cost, and interest rate offered to borrowers is also decreased to
remain competitive with other P2P lending platform.
• Create – A risk diversification model has been introduced to deduct the
risks of non-performing loan. We also introduce the only service to the
market by having loan with security scheme. Meaning, whenever the
borrowers failed to repay debs, the lenders gain exactly the same amount
of loaned money.
4.4 Subscription Business Model
There are many experts define what business model really meant, some author
prefers to mention business model as an art while others interpret business model
as a way to generate money. Ovans (2015) emphasizes “business model is
presumption of how company’s get income”. It does not matter what business
model used by company, as long as they gain profit and not involved with illegal
practices. Harvard Business Review conclude the fundamental of making decent
business model is knowing who is the customer and the value they have. In order
to make a suitable business model, MFC is adopting business model canvas.
58
Figure 21
Business Model Canvas
Source: Steve Blank
• Key Partners – We have partnership with Mandiri bank (Indonesian

Bank) providing loan notes to either borrowers or lenders from our
platform. Mandiri Bank is the largest public bank in Indonesia with the
highest assets and market capitalization in Indonesia. Apart from that,
Mandiri bank is the bank provide loan with security to be available in
MFC offer.
• Key Activities – Our main activities are distributing loan from our lenders
to borrowers joining in My First Capital P2P lending platform. We prefer
to treat our customers as clients in order to maintain close relationship.
• Key Resources – The fundamental resource in running the business is our
website acting as the mediator between lenders and borrowers meeting
online, and of course our server has to be on optimum performance to
support the business.
59
• Value Proposition – Essentially, yes we are providing people lending
their money and borrowing money with better interest rate and return than
banks or even other P2P lending platform in Indonesia. Furthermore, we
introduce a unique offer which never been done in Indonesia, loan with
security and risk diversification model for our appreciation to customer.
• Customer Relationship – Apart from providing online staff on the
website, we also assist customer with our customer service which enable
to be reached by phone. Our customer service staffs are able to answer all
the questions regarding our offers and services.
• Channel – Online marketing method is doing fundamental task in
spreading our offer to the target market. We prefer utilizing online
marketing than offline marketing as it cheaper and more effective in
reaching our target market. Methods such as Search Engine Optimization,
Pay Per Click, Facebook advert, YouTube advert should be used.
• Customer Segment – Our customer target is Small-medium enterprises
(SMEs) needing more capital or investment to expand or finance their
operation. There are at least 57 million SMEs in Indonesia and figure is
growing each year. Furthermore, we also serve general people who want
to use our platform.
• Cost Structure – Lots of capital generated will be spent on building a
website which include coding, design, and programing. The other should
be taken out for server, office rent, and furniture.
• Revenue Streams - Our revenue is generated from the fees application by
either borrowers or lenders in the platform. And the margin between
interest rate and higher return which approximately about 1-3% each loan
every month.
60
Chapter 5: Business Plan
5.1 Business Plan Overview
This section explains an approach on how to form all aspects needed into the
business, the fundamental information of My First Capital, and what drives the
business to be successful. My First Capital is a start-up company playing in
financial technology industry especially in peer-to-peer (P2P) lending or finance.
The company is acting as one of the platform in P2P lending, distributing the
lenders money to the borrowers in our platform. Our first market should be
Indonesian market which consist of 260 million citizens and specifically we target
10 million citizens in Jakarta. Consider our business runs well in Indonesia, we
plan to expand our operation to neighboring countries such as Malaysia,
Singapore, Philippines, and Timor Leste.
5.1.1 Company ownership and objectives

The owners of My First Capital are Kemal Salim Ashshidiqi together with Dr.
Mizwar Nur and Asmida Martum. Meaning the company ownership structure is
partnerships, the risks of the business should be shared equally between parties.
We plan to change our company structure become corporation or LLCs if our
performance is successful in order to separate entity between owner and the
business. To achieve company’s vision and mission which mentioned earlier on
chapter one, below is the objectives of My First Capital:
• Distributing loan to SMEs borrowers in order to improve local economy
quickly.
• Partnering with more than one bank as currently we have only partnering
with Mandiri Bank.
• Attract giant investors or lenders to raise our distributed loan.
• Having at least 10% of total SMEs in Indonesia joining our platform
61
5.1.2 Company location and company’s partner
The first office is located at Beltway Office Park, a business complex at
Simatupang street, the heart of start-up industry at South Jakarta. The chosen
office location eases our employee as it close to public transportation, either bus
or train and Beltway Office is close to outer Jakarta Ring Road. The office
consists of meeting room, employees working area, and server room. Moving
from the company location, we do have partner with several companies in
Indonesia which have different background from banking industry to media
industry. Crowther et, al (2004) states that “partnering brings many benefits such
as increase brand awareness, improve positioning and company’s efficiency”.
Below are companies partnering with My First Capital:
• Mandiri Bank – It’s the biggest public bank in Indonesia by market
capitalization and the assets. They have the same goal as MFC which is
helping SMEs to grow and sustain the market.
Figure 22
Mandiri Bank
Source: Mandiri Bank
• BBC Indonesia – BBC Indonesia is a company under BBC UK operating

in Indonesia. The company is having wide network across Indonesia and
inform the development of financial technology continuously. Therefore,
partnering with them should present many favor.
62
Figure 23
BBC Indonesia
Source: BBC Indonesia
• Indonesian Fintech Association (IFA) – Partnering with IFA will bring

an immense advantage toward MFC. First, IFA is consolidating and
providing us with important information about Fintech industry
continuously. IFA shared the same vision and mission with MFC as to
develop SMEs together. Our collaboration is crucial and fundamental now
and in the future.
Figure 24
Indonesian Fintech Association
Source: IFA
63
5.1.3 Promotion and marketing strategies
Having effective marketing plan is compulsory for MFC to win the competition,
comprehend the needs and wants of the target group. Luther (2011) expresses
“marketing plan does not always refer to promotion, selling, and advertising, but
also how company maintain customer satisfaction and relationship”. MFC is
going to utilize two marketing method, online and offline marketing method. As
mention earlier on previous chapter, we encourage the use of online marketing
than offline marketing for several reasons; cheaper, more efficient, and effective
to reach our target market. Although we rely on online marketing for the method,
we still use less offline marketing to communicate with our target market.
• Online marketing: we strengthen the use of search engine optimization
(SEO), Social media optimization (SMO), Social media marketing,
campaign marketing, e-mail marketing, and other online digital method.
We are sure that this online marketing scheme should be success and it is
in line with our platform that based on the website.
• Offline marketing: Traditional marketing such as brochure, flier,
pamphlet, advertise on printed media are the element of offline marketing.
We obviously going to implement that approach but not become our main
focus as mean of communication to the potential customer.
5.2 Proposed Plan of Action
“Plan of action needed in order to reveal what fundamental elements which need
to be completed and knowing how long does it take to finish the actions” (Sellars,
2009). Further, the plan of action enables the management to determine and
evaluate the action so that the implementation could be more efficient and
effective. The plan of action of My First Capital will be shown in the table below:
64
Table 15
My First Capital’s Plan of Action
No Actions (Elements) Duration (Week)

1 Market research
1.1 To segment the market 1
1.2 To target the market 1
1.3 Analyzing industry 1
1.4 Analyzing customer 1
1.5 Analyzing market competition 1
2 Business Structure Development
2.1 Constructing business strategies 1
2.2 Partnership assessment 2
2.3 Dealing with partners 2
2.4 Legal requirement 4
3 Setting Up Plan
3.1 Searching the rented office 1
3.2 Redesigning the office building 2
3.3 Purchase the furniture and computers 1
3.4 Installation 1
4 Marketing
4.1 Website Creation 3
4.2 Online marketing operation (Hired) 1
4.3 Offline marketing operation (Hired) 1
5 Beginning of Operation
5.1 Staffs recruitment 4
5.2 Server installation 1
5.3 Training and development 2
6. Enrolment The End of July 2017
65
It requires the total of 33 weeks from conducting market research to the enrolment
of the venture. The market research activities starting in December and the
enrolment should be approximately 8 months later, July 2017. The average period
to complete one activities is a week, but some complex activities such as legal
requirement, website creation, and staff’s recruitment take longer than that. For
instance, the Indonesia bureaucracy is quite complex and long-winded and
sometimes the businesses need to do money under table to complete the process.
According to WorldBank (2016) “Indonesia is ranked number 109 for the doing
business rank, starting a business easiness at rank 173, and dealing with
construction permit at number 107”.
5.2.1 Discussion of Critical Success/Failure Factors

Every business is expose with limitations either external or internal factors. Kariv
(2013) mentions “even though entrepreneur has assessed risks internally and
externally, there is always a slit of unexpected event happen”. For MFC itself, the
most possible risks are coming externally such as upcoming government
regulations, technological changes, and demographic shifts while internal factor
consist of lack of management experience. “Since Indonesian Financial Authority
(OJK) should be announcing the regulations toward P2P lending platform at the
end of year 2016, they pretty much alter the P2P lending platform environment as
the policies will be made by the response of Indonesian” (Sari, 2016). From the
beginning of P2P lending platform until today, P2P lending platforms have been
able to cover the financing gap in Indonesia and assist SMEs to grow faster.
The factors leading to failure should be whenever Government take sides on

Banks and big financial institution and encourage them to establish P2P division
as well. This could bring massive impact toward the development of P2P lending
platform as P2P lending platform unable to compete directly with the banks. “The
loophole for P2P lending platform is to cover the 65% of loan which not covered
by Banks and financial institutions” (Kominfo, 2016). The majority of uncover
loans are coming from outside of java and the borrowers’ assessment could be
trickier as it harder to evaluate them far away from Jakarta. Therefore, creating an
66
efficient assessment program enable MFC become the leading platform in peer-to-
peer lending industry in Indonesia.
5.3 Exit Strategy
“The business development plan should comprise with exit strategy in order to
prepare for oncoming situation” Akdeniz, (2016). Fundamentally, MFC
management aim to expand the business across the country, not only build a
thriving venture that able to be sold for an immense return but the owners also
intend to carry on the venture until the retirement day. Whenever the proposed
business plan is not work well or unsuccessful, the owners are ready to minimize
the loss occurred for the investor by doing two approach; (1) Doing merger allows
MFC to “join forces with other company within industry to maintain the costs and
resources spending low” (Mirvis and Marks, 2003). (2) Sell the business to other
company or individual investor is the second way of the exit strategy, considering
the brand image, name, and reputation of MFC. It should not be hard to sell off.
67
References
1. Abbot, J. (2015) Pestle analysis for students. USA: Create Space

Independent Publishing Platform.
2. Abrahams, C. and Zhang, M. (2009) Credit Risk Assessment: The new

lending system for borrowers, lenders and investor. New Jersey: John
Wiley and Sons, Inc.
3. Afuah, A. (2014) Business model innovation: concept, analysis, and cases.

New York: Routledge.
4. Atz, U. and Bholat, D. (2016) Staff working paper: peer-to-peer lending

and financial innovation in the United Kingdom. (Online research)
Available at;
http://www.bankofengland.co.uk/research/Documents/workingpapers/201
6/swp598.pdf; (Accessed 11 Oct 2016).
5. Bakker, E. (2015) Peer-to-peer lending: how digital lending marketplace

are disrupting the predominant banking model. (Online journal) Business
Insider. Available at; http://uk.businessinsider.com/peer-to-peer-lending-
how-digital-lending-marketplaces-are-disrupting-the-predominant-
banking-model-2015-05?r=US&IR=T; (Accessed 10 Oct 2016).
6. Barnett, H. and Morse, C. (2013) Scarcity and growth: the economics of

natural resource availability. New York: RFF Press.
7. Barney, J. and Clark, D. (2007) Resource-based theory: creating and

sustaining competitive advantage. Oxford: Oxford University Press.
8. Berkowitz, B. (2008) Strategic advantage: challengers, competitors, and

threats to America’s future. Washington: Georgetown University Press.
68
9. Bititci, U. and Carrie, A. (2013) Strategic management of manufacturing
value chain. USA: Springer Science + Business Media, LLC.
10. Blank, S. and Dorf, B. (2012) The startup owner’s manual: The step-by-
step guide for building a great company. California: K&S.
11. Bradley, N. (2013) Marketing research: tools and techniques. Oxford:

Oxford University Press.
12. Brown, L. and Beik, L. (2008) Marketing research and analysis. New
York: Ronald Press.
13. Bruhn, M. and Georgi, D. (2006) Service marketing: managing the service
value chain. London: Financial Times/Prentice Hall.
14. Cafferky, M. and Wentworth, J. (2010) Breakeven analysis: the definitive

guide to cost-volume-profit analysis. New York: Business Expert Press,
LLC.
15. Chandra, P. (2008) Financial management: theory and practice. New

Delhi: Tata McGraw-Hill Publishing Company Limited.
16. Collins, H. (2010) Creative Research: The theory and practice of research
for the creative industries. AVA Publishing.
17. Crowther, J., Crowther, J. and Trott, B. (2004) Partnering with purpose: a
guide to strategic partnership development for libraries and other
organization. London: Greenwood Publishing Group.
18. D’heur, M. (2015) Sustainable value chain management: delivering

sustainability through the core business. London: Springer.
69
19. Fifield, P. (2012) Marketing strategy. Oxford, England: Butterworth-
Heinemann.
20. Floyd, D. (2015) How able lending works. Available at;
http://www.investopedia.com/articles/personal-finance/052815/how-able-
lending-
works.asp?ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186;
(Accessed 20 Oct 2016).
21. Giordano, M., Mathieu, L. and Villeneuve, F. (2012) Product lifecycle

management. London: ISTE.
22. Given, L. (2009) The Sage encyclopedia of qualitative research method,

Los Angeles: Sage.
23. Hill, C. and Jones, G. (2008) Strategic management: an integrated

approach. USA: Cengage Learning.
24. Hitt, M., Ireland, R. and Hoskisson, R. (2006) Strategic management

competitiveness and globalization: concepts and cases. USA: Thomson
South-Western.
25. Hitt, M., Ireland, R. and Hoskisson, R. (2012) Understanding business

strategy. USA: South-Western Cengage Learning.
26. Howell, K. (2013) An introduction to the philosophy of methodology.

London: Sage.
27. Ibrahim, N. and Verliyantina. (2012) The model of crowdfunding to
support small and micro business in Indonesia through web-based
platform. Indonesia: Elsevier.
70
28. Indonesia investment (2016) (Online) Avalaible at; http://www.indonesia-
investments.com/id/keuangan/angka-ekonomi-makro/produk-domestik-
bruto-indonesia/item253; (Accessed 5 Oct 2016).
29. Kariv, D. (2013) Entrepreneurship: an international introduction.

London: Routledge.
30. Kenny, G. (2009) Diversification strategy: how to grow a business by

diversifying successfully. London: Kogan Page.
31. Kim, W. and Mauborgne, R. (2015) Blue ocean strategy, expanded

edition: how to create uncontested market space and make the competition
irrelevant. Boston: Harvard Business School Publishing Corporation.
32. KOMINFO. (2016) Financial technology: Analisa peluang Indonesia

didalam era ekonomi digital dari aspek infrastruktur, teknologi, SDM, dan
regulasi penyelenggara dan pendukung jasa system pembayaran. (Online
Report) Availabe at;
http://skim.kominfo.go.id/temuilmiah/download/Sesi%201/Bank%20Indo
nesia%20-%20Materi%20Temu%20Ilmiah.pdf; (Accessed 7 Oct 2016).
33. Kothari, C. (2014) Research methodology: methods and techniques. India:

New age.
34. Kotler, P. and Armstrong, G. (2011) Principles of Marketing, New Jersey:

Pearson Education.
35. Lamb, C., Hair, J. and McDaniel, C. (2012) Essentials of marketing,

Mason: South-Western Cengage Learning.
36. Luther, W. (2011) The marketing plan: how to prepare and implement it.
USA: American Management Association.
71
37. McDonald, M. and Dunbar, I. (2012) Market segmentation: how to do it
and how to profit from it. London: Macmillan.
38. McGivern, Y. (2009) The Practice of market and social research. Harlow,
England: Prentice Hall/Financial Times.
39. McKinsey&Company (2016) Urban world: the global consumers to

watch. (Online report) Available at;
file:///Users/kemalashshidiqi/Downloads/Urban-World-Global-
Consumers-Full-Report.pdf; (Accessed 11 Oct 2016).
40. Mirvis, P. and Marks, M. (2003) Managing the merger making it work.
Washington: BearBooks.
41. Oliver Wyman, (2016). (Online report) Time for marketplace lending.
Available at; http://www.oliverwyman.com/content/dam/oliver-
wyman/global/en/2016/apr/Time_For_Marketplace_Lending.pdf;(
Accessed 30 Aug 2016).
42. Olsen, W. (2012) Data collection, London: Sage.
43. Ovans, A. (2015) What is a business model. (Online Journal) Harvard

business review. Available at; https://hbr.org/2015/01/what-is-a-business-
model; (Accesed 9 Oct 2016).
44. Porter, G. and Norton, C. (2016) Financial accounting: the impact on
decision makers. USA: Cengage Learning.
45. PriceWaterhouseCooper. (2015) Where traditional and tech meet: how

banks and marketplace lenders can partner up. (Online report) Available
at; http://www.pwc.com/us/en/consulting-services/assets/pwc-
marketplace-lending-partnerships.pdf; (Accessed 30 Sept 2016).
72
46. PricewaterhouseCoopers, (2015). (Online Report) Peer Pressure: How
peer-to-peer lending platforms are transforming the consumer lending
industry, Available at; http://www.pwc.com/us/en/consumer-
finance/publications/assets/peer-to-peer-lending.pdf; (Accessed 10 Aug
2016).
47. Proctor, T. (2014) Strategic marketing: an introduction. New York:

Routledge.
48. Rothaermel, F. (2016) Strategic management: concepts. London:

McGraw-Hill
49. Sanders, L. (2011) Developing new products and services. USA: Business
Expert Press.
50. Sellars, D. (2009) Business plan project: a step-by-step guide to writing a

business plan. USA: Business Expert Press.
51. Stalnaker, S. (2008) Here comes the P2P economy. (Online Journal)
Harvard Business Review. Available at; https://hbr.org/2008/02/here-
comes-the-p2p-economy; (Accessed 5 Oct 2016).
52. Stark, J. (2015) Product lifecycle management. London: Springer.
53. Stokes, D., Wilson, N. and Mador, M. (2010) Entrepreneurship.

Hampshire, UK: Cengage Learning EMEA.
54. The World Bank (2014) Financial inclusion (Online report) Available at;
http://siteresources.worldbank.org/EXTGLOBALFINREPORT/Resources
73
/8816096-1361888425203/9062080-1364927957721/GFDR-
2014_Complete_Report.pdf; (Accessed 5 Oct 2016).
55. Thomson, J. and Martin, F. (2010) Strategic management: awareness &

change. UK: South-Western CENGAGE Learning.
56. UBS Evidence Lab, (2016). (Online report) Whether Fintech is a threat or
an opportunity, Available at; http://fintechranking.com/2016/08/08/ubs-
report-on-whether-fintech-is-a-threat-or-an-opportunity/; (Accessed 30
Aug 2016).
57. United Nation Development Plan (2016) Middle income citizen in

Indonesia (Online) Avalaible at; http://www.id.undp.org/; (Accessed 3 Oct
2016).
58. Vartanian, T. (2011) Secondary data analysis. Oxford: Oxford University

Press.
59. Worldometers (2016) Indonesia population. (Online) Available at;

http://www.worldometers.info/world-population/indonesia-population/;
60. Zopa. (2016). First P2P lending platform. (Online) Available at;
https://www.zopa.com/peer-to-peer-lending; Accessed 30 August 2016
74
Bibliography
1. Asian Development Bank (2016) GDP Growth. (Online) Available at;

https://www.adb.org/countries/indonesia/economy; (Accessed 10 Oct
2016).
2. DoingBusiness.org (2016) (Online) Available at;

http://www.doingbusiness.org/data/exploreeconomies/indonesia;
3. Freedman, D. and Nutting, M. (2015) A brief history of crowdfunding:

Including rewards, donations, debt, and equity platforms in the USA.
(Online journal) Available at; http://www.freedman-
chicago.com/ec4i/History-of-Crowdfunding.pdf; (Accessed 30 Sept 2016).
4. Internet Society. (2016) Availabe at;

http://www.bankofengland.co.uk/research/Documents/workingpapers/201
6/swp598.pdf; (Accessed 16 Oct 2016).
5. Nordiansyah, E. (2016) Indonesia must rapid response rapid growth

Fintech. (Online report) Available at;
http://ekonomi.metrotvnews.com/mikro/yNL83Y6N-indonesia-harus-
cepat-respons-perkembangan-pesat-fintech; (Accessed 5 Oct 2016).
6. Pratama, A. (2016) Tak pernah alami kredit macet, modalku raih

pendanaan Rp 100 milliar. (Online) Techinasia. Available at;
https://id.techinasia.com/modalku-platform-pi
7. Sari, E. (2016) Modalku raup pendanaan Rp 100 miliar. (Online) CNN

Indonesia. Available at;
http://www.cnnindonesia.com/ekonomi/20160804120811-78-
149167/modalku-raup-pendanaan-rp100-miliar/; (Accessed 30 Sept 2016).
75
8. Sienaert, A. (2015). (Online) Understanding Indonesia’s GDP revision.
Available at; https://www.weforum.org/agenda/2015/02/understanding-
indonesias-gdp-revision/; (Accessed 20 Oct 2016).
9. njaman-dana-raih-pendanaan-seri-a; (Accessed on 30 Sept 2016).
10. The Guardian (2016) Project Loon: Google ballon that beams down
internet reaches Sri Lanka. Avalaible at;
https://www.theguardian.com/technology/2016/feb/16/project-loon-
google-balloon-that-beams-down-internet-reaches-sri-lanka; (Accessed 15
Oct 2016).
11. The Jakarta Post, (2016). Indonesia on P2P lending. (Online) Available at;
http://www.thejakartapost.com/news/2016/05/25/analysis-peer-peer-
lending-an-alternative-way.html; (Accessed 20 Aug 2016).
12. Trianita, L. (2015) Indonesia out of FATF Blacklist. (Online Source)

Avaliable at;
http://en.tempo.co/read/news/2015/06/25/056678258/Indonesia-out-of-
FATF-Blacklist; (Accessed 20 Oct 2016).
76
Appendix
Value Added of My First Capital

To leave the customer with satisfaction and comfortable mind as well as to ease
the stage in getting the loan, we propose some value to maximize customer
satisfaction toward our platform. Below are some values applied:
1. No collateral – We eliminated the requirement that generally charged by
the Bank and other financial institutions
2. Funds received in flash – Just give six days to raise funds from lenders
3. Affordable interest rate - 13-20% P.A, Get the best interest rate for the
speed of the process is offered.
4. Platform and mechanism are secured - We guarantee the security of
financial transactions and your personal information.
5. Short process – More or less 6 Days, with the help of technology, we were
able to analyze the data with a shorter time.
77
Special Feature of My First Capital
We realize that P2P lending platform is exposed to fraud, scam, and no

performing loan or borrowers unable to repay their debt. Therefore, we introduce
a system to minimize the risk while making our customers feel safe and
comfortable in especially for lenders who join to finance borrowers. We call it
risk diversification, the concept works such when the lenders finance borrowers,
we from MFC will not finance one borrower with one lender, instead we will
gather let say ten lenders to finance one SMEs for £5,000, then the rest of lenders
money will be refinancing to another SMEs. Below is the illustration of this:
Figure 8
Risk Diversification
78

Business Development Proposal PEER-TO-PE

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Business Development Proposal PEER-TO-PE

Uploaded by

Copyright:

Available Formats

Business Development Proposal

PEER-TO-PEER LENDING PLATFORM: MY

Kemal Salim Ashshidiqi

Submitted in fulfilment of the requirement of the

I hereby declare that this Business Development Project entitle PEER-to-PEER

Kemal Salim Ashshidiqi

• Table 1: Scale and growth anticipation

Further, I would like to express my highest appreciation to all lectures teaching

My First Capital (MFC) will utilize technological approach significantly,

1.1 Business Background

Inspired by the evolution of financial technology (Fintech), peer-to-peer (P2P)

Following the emergence of crowdfunding platform as one of the Fintech method,

1.3 The Business Opportunity

1.3.1 Rationale behind the business idea

Source: Sea city maps

Source: The Wise Traveler

1.3.2 Target market, customer and market accessibility

1.4 Report Structure

2.1 The Business Opportunity

Source: UBS Evidence Lab

2.2 Business Concept

2.2.1 Business idea

2.2.2 Vision and mission

2.2.3 Products and services

Interest rate and return competitiveness

Source: Created by author

2.2.5 Scale and growth anticipation

2.3 Business Model

3.1 Market Research Methodology

(a) Problem Formulation

(b) Aim of the current market research

3.1.3 Information types and sources that are required

3.1.4 Proposed methods of data analysis

3.1.5 Formulation of finding

3.1.6 Ethic issues

3.2 Market Research and Product Service

Generally, secondary data is available publicly and can be accessed by anyone.

Source: World Bank

Source: Ministry of Information and Technology of Indonesian Republic

Source: World Bank

Only 36% of Indonesian adult having an account at Banks or other financial

Source: Ministry of Information and Technology of Indonesian Republic

Source: Created by author

3.2.4 Market Segmentation

Demographic Gender Both gender

General Survivors, experiencers, and something better

Source: Created by author

Revenue above To grow and

Source: Created by author

3.2.5 Identification of the business opportunity – product/service

Home Improvement 14-19% p.a. 12-17% p.a.

Vehicle Finance 15-20% p.a. 13-17% p.a.

SMEs Loan 13-20% p.a. 11-18% p.a.

3.3.1 Product life Cycle

Source: Created by author

• Introduction – The new venture will be located in the capital city

3.4 Organizational Feasibility

Marketing Manager Chief accountant

Source: Created by author

Financial projections including new-venture capital, MFC initial expenses, sales

Estimation of sales buildup

3.5.1 New-Venture capital of My First Capital