44494 - FMF-KBC Senior Loan

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Summary of Investment Information

Project Number

44494

Company Name

PT KB FINANSIA MULTI FINANCE

Date SPI Disclosed

Oct 3, 2020

Country

Indonesia

Region

East Asia and the Pacific

Projected Board Date

Oct 23, 2020

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Mar 26, 2024

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Oct 23, 2020
Signed : Dec 21, 2020
Invested : Jan 21, 2021

Sector

Microfinance and Small Business - Non Commercial Banking

Project Description

The proposed IFC investment entails a financing package to PT KB Finansia Multi Finance (“FMF”) in the amount of up to US$150 million (in IDR equivalent) to be comprised of senior loans committed in tranches (“Project”). The Project is to support FMF's lending program to sustain and support the recovery of Indonesia’s middle-low income households as well as micro, small and medium enterprises (“MSME”) as well as other financing purpose(s) to be agreed between IFC and FMF during and post COVID-19 pandemic.

FMF is a non-banking financial institution (“NBFI”) in Indonesia focusing on providing financing to micro and small entrepreneur/businesses, with motorcycles, cars as collateral. As of December 2019, FMF’s total assets stood at around US$245 million, with equity of around US$41 million.

Associated Advisory Engagement

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	50.0
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 MSME (mix of Micro and SME)

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

Development Impact

Project Outcomes: Stakeholder effects-increased access to finance for MSMEs. Market Creation: 1) Inclusiveness: bridge the financing gap for the bottom-of-pyramid entrepreneurs who raised working capital by collateralizing their vehicles. 2) Resilience: facilitate FIs provide funding support their customers' operating cash flow to promote jobs as well as broader stability during Covid-19.

Financial Additionality: offer 3-5 years tenor funding to FMF, which is not readily available to Indonesia NBFIs, especially under current Covid-19 impact to market liquidity. Non-financial Additionality: (i) Standard setting: help FMF upgrade E&S standards and other areas for enhancements; (ii) Knowledge and capacity building: share IFC's global knowledge on risk management and efficiency improvement.

E&S Category Rationale / Risks and Mitigation

The proposed project entails a senior loan to support the growth of PT. KB Finansia Multi Finance (“KBFMF”), a non-banking financial institution in Indonesia providing consumer lending and motor vehicle refinancing. The environmental and social (E&S) risks and impacts associated with KBFMF’s lending activities are considered as low. Therefore, the project has been categorized as a Category FI-3 project according to IFC Sustainability Policy. The project will not support coal-related activities and higher risk business activities that may include a) involuntary resettlement, b) risk of adverse impacts on Indigenous Peoples, c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage or d) significant Occupational Health and Safety risks. Applicable E&S performance requirements for the project will be IFC Exclusion List and relevant host country E&S laws and regulations. Under the Project, KBFMF will be required to implement a simple E&S management system to manage lending activities in accordance with the applicable performance requirements. KBFMF will be required to align its recruitment practice with IFC Performance Standard 2 requirements on labor and working conditions as well as to amend emergency response plans for its operations.

Project Outcomes: Stakeholder effects-increased access to finance for MSMEs.

Market Creation: 1) Inclusiveness: bridge the financing gap for the bottom-of-pyramid entrepreneurs who raised working capital by collateralizing their vehicles. 2) Resilience: facilitate FIs provide funding support their customers' operating cash flow to promote jobs as well as broader stability during Covid-19.

Contacts

For Inquiries About the Project, Contact

PT. KB Finansia Multi Finance
Jessica Novia
Finance Department
021-29333646
cs@kreditplus.com
Jl. Jendral Sudirman Kav. 52-53 SenopatiJakarta 12190
https://www.kreditplus.com/en/profile

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