CIMB Niaga, one of the largest private national banks in Indonesia, is collaborating with Singapore-based private venture lending firm Genesis Alternative Ventures to build a venture debt fund specifically to finance Indonesian startups, as reported by a local media outlet Kontan.

The two companies are preparing initial USD 20,7 million (IDR 300 billion) for startups in the fashion and retail sector; in manufacturing; food & beverages; health; digital security; and transportation.

Although most startups look for fresh investment through equity financing, the demand for venture debt financing is also increasing,  the president director of CIMB Niaga Tigor Siahaan told the local press. Equity financing can cause dilution or a decrease in stockholder’s ownership percentage, which makes venture debt an effective alternative in some stages of growth.

This collaboration is part of Genesis’ expansion in Southeast Asia. The firm has backed three startups so far, namely Singapore-based Horangi Cyber Security, online restaurant Grain, and Indonesian workspace provider GoWork, and is aiming to target eight more companies in the region.