25144 - WOM Finance Loan

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Summary of Proposed Investment

Project Number

25144

Company Name

WAHANA OTTOMITRA MULTIARTHA, PT TBK.

Date SPI Disclosed

May 18, 2006

Country

Indonesia

Industry

Financial Markets

Projected Board Date

Jun 17, 2006

Status

Completed

Sector

Finance Companies - Consumer Finance

Date Revised SPI Disclosed

May 31, 2006

Department

Regional Industry - FIG Asia & Pac

Environmental Category

C - No Impact

Previous Events

Approved : Jun 27, 2006
Signed : Jul 6, 2006
Invested : Sep 12, 2006

Project Description

PT. Wahana Ottomitra Multiartha Tbk. (WOM or the company) is the third largest motorcycle finance company in Indonesia, a fast growing segment of the consumer finance market in the country. Established in 1982, WOM initially financed mostly receivables of Honda motorcycles, which was the leading motorcycle brand in Indonesia. To capitalize on the growing locally manufactured motorcycle market, the company subsequently added other brands to their brand portfolio. The company’s branch network has grown from just 4 in the beginning to 90 today, supporting 3,300 dealers throughout Indonesia.

The project consists of a local currency medium-term IFC Loan of up to $20 million equivalent to WOM. The proposed IFC Loan would represent a stable source of funding which would help WOM to expand its motorcycle financing/leasing activities, diversify its funding base and better match its asset/liabilities.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	20.0
Equity

Development Impact

Developmental Impact:

WOM is exclusively involved in the financing of motorcycles, which are the principal means of personal and business transportation for low income groups in Indonesia. The financing of the motorcycles contributes to the Indonesian economy in a number of significant ways, but two of the most important are:

- the vast majority of motorcycles sold in Indonesia have a significant local value added component involving the assembly within local factories as well as downstream suppliers; - the majority of the motorcycle owners use the cycles as part of their small/micro businesses as an efficient mode of transportation for the delivery of goods and services.

The project will also support the development of an important non-bank financial institution (NBFI) in Indonesia. In addition to strengthening the banking sector which is dominating Indonesia''s financial system, Indonesia needs to develop a strong NBFI sector, which can efficiently provide financing to small medium enterprises and consumers through its ability to lower operational costs and deal with much smaller customers than banks would like to do.

IFC’s Role:

Through the proposed investment, IFC would be playing an active role in:

- developing a long term partnership with important financial intermediary which shares several common goals with IFC,
- providing much needed long term financial resources not commonly available in the domestic markets,
- improving asset liability structure of an important NBFI, thereby reducing its balance sheet risks, and
- supporting a company in building its capacity to tap the securitization markets when these become viable financing sources in Indonesia.

Contacts

For Inquiries About the Project, Contact

Alex Tandun
International Finance Corporation
Jakarta Stock Exchange Building
Tower 2, 9th Floor
Jl. Jend. Sudirman Kav. 52-53
Jakarta 12190, Indonesia

This Summary of Project Information (SPI) is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC's activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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