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Presented by: Johanes Saragih

(Executive Vice President of Mikro Business Development Division 1)

PT. BANK RAKYAT INDONESIA (PERSERO), Tbk Jakarta, 16 October 2014

The views expressed in this presentation are the views of the author and do not necessarily reflect the views or policies of the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.

Stock Price: Trend

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BRI: Performance in Brief

Industry Indicators:

OER : 75.45% NPL : 2.16% ROA : 3.02% NIM : 4.22% Profit : Rp 58.43 Trillions

OER : 63.58% NPL : 1.97% ROA : 4.92% NIM : 8.93% Profit : Rp 11.72 Trillions

We Serve: 8.2 millions debtors

(Rp 459 Trillions Outstanding)

43.4 millions saving accounts (Rp 488 Trillions)

Assets : Rp 621 Trillions CAR : 18.10% FBI : Rp 2.68 Trillions

With

123,000 Employees

Source: www.bri.co.id

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Harga Volume (Millions) BBRI

volume

*Data as of June 2014

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.

.

Program Loans

Small/Retail

Loans

Feasible, Bankable

Not Feasible, Not Bankable

Feasible, Not Bankable

Feasible, Bankable

Mikro Loans

Feasible, Bankable

Medium

Loans

Corporate

Loans

Feasible, Bankable

KUR Mikro

Rp 1 million up to

Rp 20 millions

(US $ 1,660)

KUPEDES

Rp 1 million up to

Rp 100 millions

(US $ 8,330)

KMK,KI,KMKE

Rp 100 millions

(US $ 8,330)

up to

Rp 5 billions

(US $ 416,000)

KMK,KI,KMKE

Rp 5 billions

(US $ 416,000)

up to

Rp 40 billions

(US $ 3.3 Millions)

KMK,KI,KMKE

More than

Rp 40 billions

(US $ 3.3 Millions)

up to

Legal Lending Limit

How Do We Define SMEs?

“SME is a business segment,not merely a certain amount of loan”

MSME: 70% of BRI’s Total Loans

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Who Do We

Serve

Mikro Loans

Small/Retail Loans

Program Loans

Corporate Loans

Medium Loans

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Financing MSME : Accessibilities are The Key

How Do We Serve SMEs

Access to Finance

MSME: “Native”, “Local”, Presence

Access to Market

Access to Technology and Innovation

Accessibilities

Physical Access (Conventional Outlets, E-Channel,

& Human outlets)

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1 Head Office

19 Regional Offices

18 Regional Audit Offices

453 Branches Offices

5,195 BRI Units (Sub-branchess

Mikro)

2 Floating TERAS (2014) (Cash Offices Mikro)

2,454 TERAS (Cash Offices Mikro)

504 Mobile TERAS (Cash Offices Mikro)

50 E Buzz (Cash Offices Retail)

577 Cash Offices (Retail) 577 Sub Branches

(Retail)

Conventional outlets :

Total: 9,850 Outlets

Our Outlets : The Largest and The Most Wide Spread

“......Bringing financial access to remote clients.....”

5a

Mobile Outlet : Teras BRI - Mobile

“...... Delivering financial access for the people in the remote islands.....”

5b

Mobile Outlet : Teras BRI – Floating

E-Channels

19,213 ATMs 92,917 EDCs 192 CDMs

“Human Outlets”

7.8 millions Mobile Banking and 1.7 millions Internet Banking (of 28.4 million Debit Cards )

5c

Our Outlets : The Largest and The Most Wide Spread

How Do We Serve SMEs

Easy Terms

Low Cost

Low Price

4 in 1: Business Process Low

Cost

Requirement Loan Officers

Prudential Banking

Access to Finance

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Industry Indicators:

OER : 75.45% NPL : 2.16% ROA : 3.02% NIM : 4.22% Profit : Rp 58.43 Trillions

OER : 63.58% NPL : 1.97% ROA : 4.92% NIM : 8.93% Profit : Rp 11.72 Trillions

6a

Loan Officers Requirement

Marketing

Financial Analyst

Legal

Mahzab BRI: 4 in 1 Loan Officers Banking Standard

Financial Analyst Legal

Collection

Marketing

Collection

Prime Lending Rate

 Mortgage  Non-Mortgage

1 PT BANK MANDIRI (PERSERO), Tbk 10.50% 12.50% 22.00% 11.00% 12.50%

2 PT BANK RAKYAT INDONESIA (PERSERO), Tbk 11.00% 11.75% 19.25% 10.25% 12.50%3 PT BANK CENTRAL ASIA, Tbk 10.50% 11.75% - 10.50% 9.71%

4 PT BANK NEGARA INDONESIA (PERSERO), Tbk 11.00% 12.35% - 11.10% 13.25%

5 PT BANK CIMB NIAGA, Tbk 11.50% 12.50% 20.00% 12.00% 12.50%

6 PT BANK PERMATA, Tbk 12.00% 12.50% - 12.50% 12.25%

7 PT BANK DANAMON INDONESIA, Tbk 12.25% 13.25% 20.94% 12.25% 17.50%

8 PT PAN INDONESIA BANK, Tbk 11.75% 12.11% 20.56% 12.11% 12.11%

Bank

Prime Lending Rate (%)

 Consumer LoanNo. Corporate

Loan

Retail

Loan

Micro

Loan

Data as of August 2014 Source: http://www.bi.go.id/en/perbankan/suku-bunga-

dasar/Default.aspx

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BRI’s Loan Officers

“Mantri” approching a new customer in wet market

Giving the best education for new account officers

Preparing “Mantri” in BRI Education Center

“Grebeg Pasar” – a mass marketing campaign to the wet market to get new customers.

5C Challenges BRI Way out

1. Characters Common people Unskilled Management

Debtor Information System (SID)

Community banking

In the usual banking practices, the functions of marketing, legal, financial analysis, and collecting handled by four separated persons. In BRI, the functions handled by one Account Officer.

2 .Capacity

- Financial No Financial Statement Repayment Capacity based

Loan Calculation Approach: • Spreadsheet • WCTO • RPC

- Managerial Unskilled Management Mentoring and Coaching

3 .Capital Limited capital Own share (Equity Financing) : 35%

4. Collateral Legal Aspect Cost of binding collateral

Fixed Asset Moral Obligation

5. Condition

Access to Finance : 5 C’s of Credit Approach

8a

How Do We Serve SMEs

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TRADE EXHIBITIONS

• Domestic

• International

TRICKLE DOWN

BUSINESS POLICIES

CAPACITY BUILDING

• Training for SME

• Seminars

How Do We Serve

ACCESS TO MARKET

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Access to Technology and Innovation

How Do We Serve

Access To Technology

and Innovation

Website

http://www.bri.co.id

Satellite

LAS Mobile

LOAN MANAGEMENT (In Brief)

MIKRO SMALL/RETAIL MEDIUM CORPORATE

Recruitment

Training

Career Path

Procedure

Loan Calculation RPC Approach WCTO Approach

LAS Mobile

3 Outlet"Loan Process

Accomplished"

Loan Initiation : Branch Office

Loan Approval : Branch Office,

Regional Office

Loan Initiation : Regional Office

Loan Approval : Regional Office

Loan Initiation : Head Office

Loan Approval : Head Office

HRD Policies

Business Process

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2

No

Spreading Sheet

LOAN MANAGEMENTSTRATEGY ACTIVITIES

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LOAN PRICING STRATEGY (Simple Approach)

COF (Cost of Funds) RR (Reserve Requirement) + COLF (Cost of Loanable Funds) OHC (Over Head Cost) + COM (Cost of Money) Risk Spread + BLR (Base Lending Rate)

FUNDING PORTOFOLIO STRATEGY

Market Driven

BI +

COF * (1+RR)

Internal

Risk Appetite

Expected Returns

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For further information: Visit us at:

www.bri.co.id

General Contact: Corporate Secretary

PT Bank Rakyat Indonesia (Persero) Tbk. Phone: +62 21 575 1966

Fax: +62 21 575 2010 E-mail: ir@bri.co.id

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Investor Relation Contact: Ninis K. Adriani

Head of Investor Relation PT Bank Rakyat Indonesia (Persero) Tbk.

Phone: +62 21 575 2019/1969 Fax: +62 21 575 2010

E-mail: ir@bri.co.id

© Divisi PBM 1

PT. Bank Rakyat indonesia (Persero), Tbk.

2014

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