Akulaku Expands BNPL Strategy to Indonesia's Tier 2, 3 Cities

Akulaku Indonesia is shifting its buy-now-pay-later growth strategy toward underserved regions beyond Java, targeting Tier 2 and Tier 3 cities in Sumatra, Sulawesi, and Kalimantan, according to an interview with Perry Barman, president director of Akulaku Indonesia. The move comes as Indonesia’s BNPL market surges, with transactions using BNPL growing 53% year-on-year to 12.6 trillion rupiah (US$726 million) as of February, according to data from Indonesia’s Financial Services Authority.

Akulaku’s own performance reflects this market momentum. In 2024, the company’s revenue rose 68% year-on-year to US$86 million, with net profit increasing 55% to US$5.6 million. Financing disbursements rose 23% over the same period to US$426 million, and Barman stated the company is targeting another double-digit growth in its loan book this year. The company previously targeted financing disbursements of US$473 million, or a 12% increase, for 2026.

Current Market Position and Merchant Network

Akulaku is currently available as a payment method for around 20,000 offline merchants across Indonesia. On the online side, the company operates a marketplace app that has been downloaded more than 100 million times on the Google Play Store. The company also has partnerships with other e-commerce players such as TikTok Shop and Lazada.

Currently, its offline segment accounts for about 25% of the company’s business, with the rest coming from its online offerings. Barman stated the company is “comfortable” with this mix, as Akulaku’s core business remains in online BNPL services. Most recently, the company partnered with hypermarket chain Transmart, which operates 45 stores across Indonesia starting February. Other partners include supermarket chain Alfamart and electronics retailers Erafone, iBox, and Digimap.

Sustainable Expansion Strategy

Barman emphasized that the expansion will be carried out “sustainably,” prioritizing prudent credit acquisition supported by strong know-your-customer processes and risk management. One way Akulaku is doing this is through integrating AI into its operations, which it uses to detect fraud and enhance its credit scoring system by analyzing data and consumer behavior.

The company also conducts financial literacy programs, particularly in Tier 2 and Tier 3 areas where consumers may be less familiar with using digital payment apps. As part of this year’s expansion, Akulaku plans to onboard new merchants in cities where it already has a presence.

Financial Health and Banking Partnerships

Akulaku’s non-performing loan (NPL) ratio stands at 1.1%, which the company describes as healthy compared to Indonesia’s BNPL industry average of around 5%. Last year, Akulaku recorded around 46 million transactions.

Akulaku does not raise funds through equity; instead, it has partnered with 16 banks to support its products. Last year, Akulaku secured funding from Hana Bank, OK Bank, and Allo Bank. A similar strategy is used by its competitor Kredivo, which also works with banks to distribute financing and is expanding into Tier 2 and Tier 3 cities. Kredivo recently bagged funding from DBS Indonesia in February.

Regarding Akulaku’s cash position, which declined by around 59% to US$13.2 million at the end of 2025, Barman stated this is “normal,” as it reflects increased disbursements as part of its expansion. He added that the company’s cash position remains “adequate” and “manageable.” “In a financing business, liquidity is actively managed and cannot be assessed solely based on cash position at a single point in time,” Barman said.

Operating Efficiency and Macroeconomic Positioning

According to Barman, Akulaku has not seen any material impact from macroeconomic and global geopolitical conditions. The company’s demand is largely driven by transactions for daily needs, with small ticket sizes, short tenors, and high frequency. Barman pointed out that these types of loans are less exposed to macroeconomic volatility.

“We are taking a wait-and-see approach on the current macroeconomic situation,” Barman stated. “There are times when we accelerate, and times when we need to slow down.”

As such, Akulaku is focusing on more efficient operating costs to maintain its profitability going forward. Barman noted that the company’s cost of funds has improved over time, allowing it to reduce interest expenses. This has been possible due to its strong credit performance, which has earned the trust of its partner banks.

“What often happens is that companies expand aggressively, but the underlying fundamentals are not necessarily strong. That’s what we are trying to avoid,” Barman added.