Indonesia’s Hijra group received external cash infusion from its series funding in early 2024, restoring its planned growth trajectory for its digital bank operations. CEO Dima Djani shared with IFN Investor that this cash runway is available until well into 2025, but declined to reveal details of the amounts received.
Dima said the arrival of this much-delayed funding provides the key impetus for Hijra Bank, anticipating that it could be cash-positive by end of this year. It also marked a turnaround from the group’s harrowing struggle over the past two odd years.
Before rebranding the fintech group as Hijra, Dima had founded the Shariah compliant P2P Alami financing platform — which grew rapidly since its P2P service was introduced in 2019 to become a huge success in Indonesia. At that stage, Alami had reported dispersing over US$200 million to more than 10,000 MSME projects, with a 0% default rate.
But Dima revealed that Alami found its growth trajectory plan curtailed by 2021 when this fintech’s seed and follow-up series investors began pivoting away — drawn to the new lure of digital banks.
Responding to this challenge, and aiming to attract an even bigger customer base, Alami acquired a rural bank — BPRS Cempaka Al-Amin — using internal funds. It was renamed, together with the group, as Hijra Bank, which then secured an Indonesian digital mobile banking license. But deep-pocket funders had already moved on.
“That was a very difficult time for us,” Dima admitted. “Without external capital to fund our growth expenses, we were forced to revise our operational strategy to reduce the cash burn.”
With 550 employees in the rebranded Hijra group asked to take pay cuts, Dima said they were first given employee stock ownership plan (ESOP) contracts. This lean period got prolonged without external cash infusion and hard choices had to be made, explained Dima.
Scaling back expansion plans meant certain medium- to longer-term gestation units had to be shut to conserve cash flow. “We bought out the ESOP contracts and laid off about 30% of our staff.”
Amid this cash bleed, Dima said the main revenue generator continued to be the P2P platform. As of April 2024, the platform has 11,370 active funders (up from 9,054 in 2022) with IDR5.2 trillion (US$320.89 million) in accumulated financing being double that in 2022.
As for the P2P platform, Dima said it will remain an integral part of the Islamic fintech group — retaining its Alami branding and be matched with Hijra Bank, providing a steady cash flow at group level.
Asked if he would have changed anything in hindsight, given how the survival of the Hijra group came under severe financial threat, Dima insisted the underlying strategy was sound — including staying the Shariah route.
“We are committed to encourage, enable and facilitate our users to upgrade their lives and move closer each day to the spirit of goodness. There were hard lessons learned, but we became better by running operations focused on revenue generation compared to the naive start-up mindset we had earlier.”
