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2013/SMEWG37/016 Agenda Item: 11.1.2

Building Clients Capability, Management, Entrepreneurship and Innovation: BRI Experience

Purpose: Information

Submitted by: Indonesia

37th Small and Medium Enterprises Working Group Meeting

Bali, Indonesia4-5 September 2013

Building Clients Capability, Management, Entrepreneurship andInnovation: BRI Experience

PT. Bank Rakyat Indonesia (Persero), Tbk.

Presented by:

Agus RachmadiHead of BRI Microfinance International

Cooperation & Marketing Strategy

MSME Definition in Indonesia

2

BusinessClassification

Business Criteria

Asset Sales Per YearMicro Less than Rp. 50 Million (exclude

business property)Max Rp. 300 Million

Small Rp. 50 Million - Rp 500 Million(exclude business property)

Rp. 300 Million - Rp. 2,5 Billion

Medium Rp. 500 Million.d Rp 10 Billion(exclude business property)

Rp. 2,5 Billion -Rp. 50 Billion

Micro Rp. 0 - Rp. 50 MillionSmall Rp. 50 Million - Rp. 500 MillionMedium Rp. 500 Million - Rp. 5 Billion

Loan Criteria (Bank Indonesia)

Sumber: Bank Indonesia, 2012

Indonesia MSME in Number

3

52,77Million

53,83Million

55,21 Million

2009

2010

2011

In Indonesia more than 90% of entrepreneur categorized as MSME. The MSME become the backboneof the economy.

Share Pelaku Usaha NasionalEstimated Number of MSME

Sumber : Kementrian Koperasi & UKM

98.83%

1.09% 0.08%

Micro Small Medium

Access toMarket

HR Quality

BusinessManagement

Access toCapital

IT

ProductStandardization

Challenge

Challenges faced by MSME

4

Sumber: MARS Indonesia

• TechnicalAssistance

• Monitoring• Guarantor

• TechnicalAssistance

• Monitoring• Guarantor

• BusinessCooperation &Alliance

• BusinessCooperation &Alliance

• Support FinancialInclusion

• Flexible LoanRegulation

• Support FinancialInclusion

• Flexible LoanRegulation

• Pro MSME Policy

• Monitoring

• Pro MSME Policy

• Monitoring

Government BankingSector

SupportingInstitutionCorporation

…In order to develop MSME, Banking Sector should work together Government, Supporting Institutionand Corporation. Banking sector should provide financial access and also act as financial advisor for the

MSME….

DEVELOPING MSME: SYNERGY BETWEEN MULTIPARTIES

5

MSME

Bank Loan Disbursement MSME Loan per Sector (March 2013)

…In Indonesia, 50.14% from total loan from Banking sector is disbursed to MSME sector…

Rp Triliun

Developing MSME in Indonesia: Bank’s Contribution

6

1,0021,308 1,438

1,766

2,200

2,708 2,768

503 634 737927

1,1511,351 1,388

2007 2008 2009 2010 2011 2012 Mar-13

Total Kredit Kredit MKM

Pertanian3%

Pertambangan1%

Perindustrian6%

Listrik0%

Konstruksi2%

Perdagangan22%

Pengangkutan1%

Jasa DuniaUsaha

6%

Jasa Sosial5%

Lain-lain54%

BRI Roles on MSME Development in Indonesia: Loan Scheme

7

Direct CashAssistance

Rolling soft loan

Subsidized loan Special scheme ofcommercial loan

Fully commercial loan

A

Level of entrepreneurship

B

C

D

E

Financing model based on entrepreneurship maturity

Fina

ncin

gm

odel

Com

mer

cial

Commercial lineCommercial line

Partnership Loan(PK)

Food and EnergySecurity Loan (KKP-

E)

Kredit UsahaRakyat (KUR)

Komersial(KUPEDES, Kredit

Ritel & Menengah)

….BRI provide many kind of loan scheme to support MSME….

8

BRI Roles on MSME Development in Indonesia: KUR

KUR, solution for feasible but not bankable business

The President of the Republic ofIndonesia officially launched the Loan

for Micro, Small and MediumBusinesses and Cooperatives using

Guarantee Scheme under the name ofKREDIT USAHA RAKYAT on

November 5, 2007 on the 21st Floor ofBRI Head Office.

9

BRI Roles on MSME Development in Indonesia: KUR

KUR refers to:

Working Capital and Investment Loans

Credit ceiling up to Rp 500 million

Provided for Micro and Small Businesses and Cooperativeswhich run productive businesses

Guaranted by insurance companies (70%/80%)

100% funded by Commercial Bank

KUR, solution for feasible but not bankable business

10

BRI Roles on MSME Development in Indonesia: KUR

Disbursed Loan(Rp. Million)

1 BRI (KUR Mikro) 60,601,244 8,350,952 7.32 BRI (KUR Ritel) 15,385,931 91,745 167.73 BNI 14,085,347 223,884 62.94 Bank Mandiri 12,329,576 243,199 50.75 BTN 3,932,124 22,238 176.86 Bukopin 1,745,102 11,669 149.67 Bank Syariah Mandiri 3,293,281 44,891 73.48 BNI Syariah 123,070 878 140.29 BPD 11,787,971 150,720 78.2

123,283,646 9,140,176 13.49

No Bank Borrower AverageLoan/Borrower

TOTAL

61.64%38.36%

KUR Market Share(Disbursed Loan)

92.37%

7.63%

KUR Market Share(Number of Borrower)

(8,442,697)

(697,479)As of July 2013, KUR already disbursed to 9,1 Millionpeople with average loan Ro. 13.46 Million/borrower.As of July 2013, 1.18 Million KUR borrower in BRI alreadymigrated to full commercial loan.

(Sumber: Kemenko Perekonomian)

11

BRI Roles on MSME Development in Indonesia: Innovation

• Survey American Banking Association, on overheadcost banks delivery channels :

– On line/Internet Banking = USD 0.01– ATM = USD 0.27– Telephone = USD 0.54– Branch = USD 1.07E-

Banking

Low Cost

Efficient

Fast

Generatenew

Business

BRI’s Customer Base: ± 51 million people

12

BRI Roles on MSME Development in Indonesia: E-Banking

13

BRI Roles on MSME Development in Indonesia: E-Banking

14

BRI Roles on MSME Development in Indonesia: Capacity Building

• For Loan Borrowers and Existing Customer

• Formal & Informal

• Formal Training: Duration 3-12 days and cooperate with training providers

• Informal Training: Mantri BRI as financial advisor

• Target Output: Increase in sales (minimum 10%), Create Innovation (3 new products),Increase in access to loan, Increase in Savings

15

BRI Roles on MSME Development in Indonesia: Capacity Building

Terima Kasih

Silakan mengunjungiwww. bri.co.id

Terima Kasih

Silakan mengunjungiwww. bri.co.id