38934 - BTPN MSME Loan

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Summary of Investment Information

Project Number

38934

Company Name

PT Bank SMBC Indonesia Tbk

Date SPI Disclosed

Dec 22, 2016

Country

Indonesia

Region

East Asia and the Pacific

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Feb 3, 2017
Signed : Jun 8, 2017
Invested : Dec 5, 2017

Sector

Commercial Banking - General

Project Description

The project, which bodes well with IFC’s financial inclusion agenda in Indonesia, involves a loan facility to PT. Bank Tabungan Pensiunan Nasional Tbk. (“BTPN” or the “Bank”). The proceeds will be used to fund the growth of the Bank’s micro and small and medium enterprises (“MSMEs”) businesses and loans to women borrowers. This facility will in turn allow BTPN to increase access to finance for the segments of the population that are currently underserved. As the facility will have a longer tenor than usual deposits, the project will also help BTPN to strengthen its balance sheet structure by reducing its asset-liability maturity mismatch.

BTPN is a mid-size commercial bank in Indonesia and is a valued client of IFC since 2009. The Bank, which business model centers around financial inclusion, targets low income pensioners, MSMEs and women entrepreneurs at the base of the pyramid. Since 2014, the Bank has increased its focus on digitization and adoption of technology to increase banking outreach to people in remote areas.

Associated Advisory Engagement

BTPN has successfully concluded the 1st phase of Non-Financial Services (“NFS”) project and has recently signed the 2nd phase NFS advisory project with IFC, demonstrating BTPN’s strong commitment to enhance its SME businesses. Both phases are under the umbrella of project #597067 EAP WIN. The NFS advisory project aims to improve the quality of products and services offered by BTPN and to further strengthen the capacity of the SME customers of BTPN.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	100.0
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Loans to SME Borrowers

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

i) Increasing the Bank's ability to provide access to finance to MSMEs, which will in turn stimulate growth, creates jobs and help reduce poverty. BTPN will be able to increase its outreach, incorporating millions of new entrepreneurs to the formal financial sector. ii) Increasing access to finance to women borrowers at the bottom of pyramid and women-owned SMEs which helps address the significant financing and capacity gap faced by women in emerging markets. iii) Increasing outreach to population in remote areas through digital banking allowing more individuals obtain formal financial services.

i) Strategic partnership: IFC-BTPN long-term partnership has demonstrated private sector development in Indonesia banking sector, including stimulating growth of microfinance among commercial banks. IFC's support will be important to maintain the stakeholders reaping benefit from the Bank continuous innovations in banking, including digital finance. ii) Balance Sheet Strengthening: IFC's revolving loan will fit the Bank's need in managing its liquidity, and reducing asset-liability mismatch given the Bank's high reliance on short term deposits. iii) Technical expertise: IFC's facility will complement its ongoing advisory service to further add value to the Bank's emerging business in SME, including towards women entrepreneurs.

E&S Category Rationale / Risks and Mitigation

Task Title & Description	Actual Due Date	Status	Comments	Completion Date
Other1 Enhancement of the existing E&S review procedure for SME lending of higher risk	03/31/2020	Rescheduled
Other2 Improve recruitment policy	02/28/2017	Completed	Revised HR policy	09/17/2017
Other3 Enhance fire safety management	07/31/2017	Completed	Fire safety policy	08/25/2017

Contacts

For Inquiries About the Project, Contact

PT. Bank Tabungan Pensiunan Nasional Tbk.
Arief Harris Tandjung
Director
Telp : +62 21 30026200, Fax : +62 21 30026101
arief.harris@btpn.com
Menara BTPN, CBD Mega Kuningan, Jl. Dr. Ide Anak Agung Gde Agung Kav. 5.5 – 5.6, Jakarta 12950
http://www.btpn.com/

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