Jakarta, Indonesia, February 2, 2018—IFC,
a member of the World Bank Group, today announced a $77 million senior
loan facility to PT. Indosurya Inti Finance (Indosurya), a local multifinance
company. The IFC-led financing package aims to bolster the country’s small
and medium enterprises (SMEs), which serves as the engine of job creation
and economic growth.
With financial institutions focusing on the largest and the smallest businesses,
Indonesia faces a dilemma of the ‘missing middle.’ Around 700,000 SMEs
in the country are often neglected, despite contributing an estimated 22
percent to Indonesia’s GDP. Also, SMEs and microenterprises jointly employ
over 89 percent of the nation’s workforce.
IFC’s funding commitment — along with advisory assistance — is part
of its broader efforts to foster private sector finance to the underserved
and help drive investments in Indonesia’s SME sector. This will help Indosurya
to increase its lending for SMEs across the islands of Java, Bali and Sumatra,
while adopting best practices in risk management.
“Financial inclusion is vital to economic growth. IFC pays particular
attention to the strong business case being made for investing in SMEs,
as it increases employment and drives growth in Indonesia,” said Azam
Khan, IFC Country Manager for Indonesia, Malaysia and Timor-Leste. “Indosurya’s
commitment to banking SMEs is expected to set a high benchmark for other
financial institutions in Indonesia and we look forward to a long and mutually
According to a study commissioned by IFC in 2016, an estimated 54 percent
of SMEs was keen for a bank loan, and the potential demand for credit from
Indonesia’s SME market stood at a substantial $11 billion. It is, therefore,
imperative that Indonesia cultivates a sustainable non-banking financial
institutions sector, which caters better to smaller sized customers and
provides targeted financing efficiently.
The financing package comprises $20 million from IFC’s own account and
another $57 million that IFC helped mobilize from seven other lenders.
This includes two development finance organizations — Oesterreichische
Entwicklungsbank AG (OeEB) and Swiss Investment Fund for Emerging Markets
(SIFEM), four impact investors — responsAbility SICAV (Lux), BlueOrchard
Finance, MicroVest Short Duration Fund, LP and Oikocredit Ecumenical Development
Cooperative Society U.A. — and one commercial bank, AfrAsia Bank Limited.
Henry Surya, CEO of Indosurya Inti Finance, said, “We are delighted with
the commencement of our strategic partnership with IFC and all respective
lenders. As a multifinance company that focuses on the SME sector, we envision
this cooperation as a long-term relationship, where IFC can bring in global
standards and experiences, extensive networks, best practices, and wide-ranging
knowledge, through its programs around the world."
The World Bank Group has taken on an ambitious goal of universal financial
inclusion by 2020. IFC is providing investments and advisory services to
financial intermediaries catering to small businesses, and promotes the
use of credit bureaus and collateral registries, as well as financial technology.
Present in Indonesia since 1968, IFC has financed and mobilized over $7.7
billion for private sector projects over the past 49 years.
Indosurya, part of the Indosurya Group of companies, began operations in
2011, and provides multipurpose, working capital and investment financing.
The privately-owned company now serves close to 2,000 clients, and provides
credit to SMEs through 70 branch offices, with point of sales spread across
Java, Bali and Sumatra.
IFC—a sister organization of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work with more than 2,000 businesses worldwide,
using our capital, expertise, and influence to create markets and opportunities
in the toughest areas of the world. In FY17, we delivered a record $19.3
billion in long-term financing for developing countries, leveraging the
power of the private sector to help end poverty and boost shared prosperity.
For more information, visit www.ifc.org
About Oesterreichische Entwicklungsbank AG (OeEB)
Oesterreichische Entwicklungsbank AG (OeEB) has been operating as the Development
Bank of Austria since March 2008. It specializes in the provision of long-term
finance for the implementation of private sector projects in developing
countries which create sustainable development. For more information, visit
About Swiss Investment Fund for Emerging Markets (SIFEM)
SIFEM is the Swiss development finance institution. It specializes in providing
long-term financing to small and medium-sized enterprises and other fast-growing
companies in developing and emerging countries. For more information, visit
About responsAbility Investments AG (responsAbility)
responsAbility is a leading asset manager in the field of development investments
and manages a range of investment vehicles that supply financing to high-impact
companies in emerging economies. responsAbility has $3 billion of assets
under management. For more information, visit www.responsability.com/en
About BlueOrchard Finance (BlueOrchard)
BlueOrchard Finance is a leading global impact investment manager. With
a major global presence and offices on four continents, BlueOrchard has
invested to date more than USD 4,7bn across 70 emerging and frontier markets,
enabling tangible social impact. For more information, visit www.blueorchard.com
About MicroVest Short Duration Fund (MicroVest)
MicroVest Capital Management is an asset management firm offering impactful
global investment opportunities for over 14 years. MicroVest lends capital
to under-banked markets, providing access to a growing portfolio of sustainable,
responsible, and scalable financial institutions. For more information,
About Oikocredit Ecumenical Development Cooperative Society U.A. (Oikocredit)
Oikocredit’s loans, investments and capacity building aim to enable people
living on low incomes to sustainably improve their living standards. Oikocredit
finances around 800 partners in 70 countries. For more information, visit
About AfrAsia Bank Limited (AfrAsia Bank)
Headquartered in Mauritius, AfrAsia Bank Limited specializes in banking
that builds bridges between Africa, Asia and the World. AfrAsia Bank Limited’s
core banking and transactional capabilities are also complemented by its
asset management arm, AfrAsia Capital Management Limited. For more information,