28038 - BTPN Convertible

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Summary of Proposed Investment

Project Number

28038

Company Name

PT Bank SMBC Indonesia Tbk

Date SPI Disclosed

May 8, 2009

Country

Indonesia

Industry

Financial Markets

Projected Board Date

Jun 10, 2009

Status

Completed

Sector

Commercial Banking - Microfinance and Small Business

Department

Global Industry, Financial Markets

Environmental Category

Previous Events

Approved : Jun 29, 2009
Signed : Sep 25, 2009
Invested : Mar 16, 2011

Project Description

The proposed project will likely consist of IFC loan financings in USD or IDR to Bank BTPN (“BTPN” or the “Company”). The proposed investment is consistent with all aspects of IFC’s strategy in the financial sector, particularly in increasing access to financial services for the underserved, the micro and small business enterprises and low income households.

The project would represent a stable source of funding which would help BTPN to:

- Expand its micro-banking business to serve mass market and low-income customers.
- Strengthen its funding base in order to reduce asset and liability mismatch.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	70.0
Equity	0.0

Development Impact

The expected Development Impact from the project are as follows:

1. Strengthening the Microfinance Sector

The microfinance sector in Indonesia is largely underdeveloped, characterized by low penetration and industry fragmentation. Supporting a new entrant run by experienced management in the microfinance sector with expansion plans in the frontier and underserved locations of Indonesia would allow IFC to support and strengthen the Indonesia microfinance sector.

2. Create Significant Job Opportunities

BTPN plans to hire additional thousands of employees to support its new microfinance outlets. The project results in job creation within BTPN, supports microfinance business growth, and provides opportunities for the potential emergence of micro-entrepreneurs, thus also supporting job creation in the microfinance sector.

The proposed project allows IFC to play an active role as:

1. Supporter of BTPN’s Entrance to the Microfinance Sector:

Microfinance is a new market for BTPN. In addition to supporting BTPN in funding needs and in managing asset liability mismatch risks, IFC is offering international best practices particularly in the areas product development, operations and risk management in microfinance.

2. Promoter of Microfinance to the Underserved Areas:

With its entrance to the microfinance sector, BTPN will target underserved areas where the incumbents have limited presence, i.e. the frontier areas and eastern part of Indonesia. With this project, IFC will support BTPN to achieve its expansion plan to these underserved locations.

This project has been classified as Category FI. Applicable requirements include IFC FI Exclusion List. The client will be required to have a functional Social and Environmental Management System (SEMS) approved by IFC, and appoint an Environmental and Social officer to ensure sound execution of the SEMS. The client will need to submit annual environmental performance reports to IFC according to an IFC-approved reporting format.

Contacts

For Inquiries About the Project, Contact

Arief Harris, CFO
Recapital Building 2nd Floor
Jl. Adityawarman Kav. 55 Kebayoran Baru,
Jakarta 12160, Indonesia
Telephone: +62 21 72792373
Fax: +62 21 7225492

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This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. 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 Policy on Disclosure of Information that went into effect April 30, 2006.

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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