Muchammad Isa Al Kaff

Co-Founder and CEO

Bayt Capital

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Could you tell us a little bit about the advantages and challenges that Indonesia
currently faces as a Muslim market?

Indonesia is the biggest Muslim country in the world and we have potentially the biggest
market for Islamic financial services or Islamic economic products. We are a little bit late in
terms of developing our Sharia industry, compared to neighboring Countries, Malaysia for
example. Malaysia is one of the centers of development of Islamic financial services in the
world. In Indonesia we do see a growing trend right now for Sharia businesses products and
services. This is positive because being the biggest Muslim population in the world comes
with great responsibility. To take care of all in our society and demonstrate our Islamic
values in the way we do business.
What kind of challenges has Bayt Capital been invented to manage? And could you
tell us a little bit about the Genesis and the development of your company?

Bayt capital is an investment management company specializing in property and more

specifically in affordable housing. We, act as a mediator between investors and housing
developers. And we have a motto - bringing home to everyone. We launched in 2022,
because we realized the fact that in Indonesia, there is a housing backlog/ and shortage of
currently, more than 12 million families who cannot afford to own a house in Indonesia,
according to the latest data. Therefore, the demand is increasing rapidly every year. There is
also additional demand for more than 900,000 housing units every year. The government
and developers alone cannot meet this demand, especially the housing for poor people and
supporting low-income communities. 93% of these housing backlogs are the people who
need it the most. There is a small incentive for affordable housing developers. But still, it's
not enough. That's why some of our contacts have started to change their business to
commercial housing. This is bad news for Indonesia, because we need more affordable
housing developers not less, that's why Bayt capital tackles this problem. Most of the
problems are they cannot find initial capital for to kick start their projects. So initial capital is
the key here. If you have the money to kick start the project with initial capital mostly for
acquiring lands and permissions and basic infrastructure, then 70% you can use to manage
the cash flow from the project. So, this is why we position ourselves as the mediator
between the investor who is interested in property, and also who has the consciousness of
impact investment. And the developers who are who are in a difficult position to find
investment for their affordable housing projects.

Currently, we manage four projects. Two of them are ongoing projects, and two of them are
new projects. And the total units of our projects are 1500 with a total project value of 18
million US dollar, and most of them are affordable housing. By sharing this data, we want to
inform your readers, the people in the world, that actually, affordable housing projects are
profitable. Affordable housing is not only about providing social impact, but it's really
profitable. On average, we offer the investor a 16.5% return per annum for each project. We
are also the only Investment Management firm specializing in property that offers asset
warranty to match the investment. What I mean by asset warranty is we match the
investment. For example, when an investor invests $1 million, we will have a contract that
also includes land or building certification that matches the value of the investment, and we
will put the certificate in our notary with binding contract. So, if something happens, for
example the project cannot continue etc, the investor can acquire the asset thus prevent
loss.

In 2023 we are targeting $2 million for our 3 current projects. Most of this fund will be used
for the initial capital to start the project. Like I mentioned before, it's for the acquiring lands,
acquiring permission to build and also basic infrastructure.

Interested investor can always access the project details anywhere anytime. Right now, we
are focusing in the Jakarta surrounding areas. They can also check the backgrounds and
track record of our partner developers and we are 100% transparent. Not only that, we also
provide our investor with site visit to the project site to check the progress and etc.

What is your vision for where Bayt capital will go? In the next three to four years?

In the next three or four years, or maybe five years, we have the long-term goal of becoming
a private equity firm which specializes still in affordable housing. Additionally, we also want
to diversify our projects, to construction and related sectors. We want to underline combining
profitability and providing social impact to communities is possible. Why I repeat this again,
and again, because most of the businesses in Indonesia, that we talk with, do not believe
this principle that provides profitability and social impact and that they can work together. We
have proven it by providing capital to our developers. We want to make sure that in the
future, not only the developers from our group, but also other developers can understand
this and can also focus on affordable housing, and at the same time still gaining profits.
Sustainability means not only social impact and maintaining or protecting environment. For
Bayt Capital, sustainability also means making enough profit to make it sustainable.
Sustainability means also sustainable profit. We want to make sure that we provide a Win-
Win solution for all stakeholders. We believe we can achieve it by working together with all
related stakeholders in this sector towards the common goal.

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