Indonesia: Helping local companies to develop

Emerging-market country Indonesia is the economic heavyweight of the ASEAN states. After years of growth, the country’s economy has slowed down noticeably. In order to develop to their full potential, local small and medium-sized enterprises in Indonesia need reliable access to long-term credit.

DEG is now financing two financial institutes specialising in providing loans to small and medium-sized companies.

Financial inclusion of small companies

Financial institute PT Indosurya Inti Finance offers financial services for SMEs and is represented in virtually all regions of the country. Its customer base includes smaller companies in particular, many of which engage in trade and are of little interest to commercial banks. As well as providing suitable financial services, PT Indosurya Inti Finance offers a swift lending process, which is an important advantage for many small companies. So that PT Indosurya Inti Finance can further expand its SME business, DEG is now providing the financial institute with a long-term loan to the amount of 20 million US-dollars. As well as this, DEG will conduct an SME Needs Assessment. With this advisory programme, it can show banks exactly how the SME business can be developed further.

Reaching underserved regions

Founded in 1992, Bank Victoria is one of the country’s larger SME banks. DEG is now participating in the bank with EUR 19.4 million so that it can further expand the services it offers to SMEs. As well as this, Bank Victoria is planning to increase its branch network in order to reach companies in regions that have been underserved to date. It also wants to renew its IT systems and to introduce new distribution channels such as online and mobile banking, which DEG is also assisting with its Business Support Services.

DEG has been active in Indonesia for over 40 years and has operated a representative office there since 1988.