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2013/FMP/WKSP4/008 Session: III

Trade Finance and SME

Submitted by: Indonesia

Workshop on Trade FinanceLombok, Indonesia

1 July 2013

TRADE FINANCE AND SME

APEC 2013- Workshop on Trade Finance

Jakarta (HQ)

Makassar

Surabaya

Medan

Office Network Corporate Overview

1999

2009

IEB’s predecessor Bank Ekspor Indonesia (“BEI”)

established

IEB commences operations on 1 September 2009 mandated to

support the national export programs

All assets and liabilities, legal rights and obligations of

BEI were transferred to IEB on establishment

Not subject to commercial banking regulations: IEB

operates independently under Act No.2/2009(1)

Wholly-owned by the State with sovereign status

Cannot be privatized under

Act 2 / 2009

Rated in line with the sovereign

Baa3 (Stable) Moody’s BBB- (Stable) Fitch

Special Institution Status Government Ownership International Ratings

2000

The Government of Indonesia commits in law to establish IEB per

Letter of Intent with the IMF

Note: (1) Republic of Indonesia No.366/KMK.06/2009 dated August 24, 2009

(2) Republic of Indonesia Act No.2 of Year 2009 on Lembaga Pembiayaan Ekspor Indonesia (Act No.2/2009)

A SOVEREIGN ENTITY TO SUPPORT INDONESIA’S NATIONAL EXPORT PROGRAMS

Providing financing to domestic and foreign entities in both conventional

and Islamic form

Financing

A range of guarantees provided to Indonesian exporters,

overseas importers and tenders related to project performance

Guarantee

Insurance facilities for exporters in the event existing export insurance

agencies cannot provide services

Insurance

Trade related consulting and technical assistance services

Advisory Services

Government of Indonesia projects to support Indonesia’s economy – risk is assumed by Indonesian

Government

National Interest Account

Priority Sectors Priority sectors in line with government’s program

Crude Palm Oil, Coffee, Rubber, Fishery, Shrimp, Textile, Processing Food, Cocoa and Footwear; Construction Services

IEB SERVICES

SME EXPORTER Importer

1. Financing 2. Loan

payment

Do

mestic

Inte

rna

tio

na

l

• End User Risk • Directly providing financing

to clients (exporters, indirect exporters and supporting export

4

TYPE I : DIRECT FINANCING FOR SME

NO CLIENTS BUSINESS SECTOR

AREA EXPORT DESTINATION TOTAL OUTSTANDING

1 Coal Transporation Service

Sulawesi Selatan Asia, Europe IDR 1.687.500.000

2 Trading Fruits and Vegetables, Plantation

Bandung, Medan, Tegal, Jakarta, Sumatera, Sulawesi

Bangladesh, China, Egypt, Mauritius, Nepal, Pakistan, U.A.E, Uruguay, Venezuela, Vietnam

IDR 120.877.347.681

3 Fishery and Poultry

Jakarta, Maluku, Jawa Timur, Sulawesi

Thailand, USA, Singapore

IDR 60.055.216.382

4 Textile, Furniture Bandung, Medan, Tegal, Jakarta, Sumatera, Sulawesi

Australia, China, Denmark, France, Japan, Malaysia, Netherland, Phillipines, Singapore, Taiwan, USA, UK, Vietnam, South Korea

IDR 560.821.345.178

5 Cacao, Seaweed, Coconut Fibre

Jakarta, Maluku, Jawa Timur, Sulawesi

Thailand, USA, Singapore

IDR 60.055.216.382

TOTAL IDR 803.496.625.500

TYPE I : DIRECT FINANCING FOR SME

Per May 2013

EXPORTER IMPORTER SME/SUPPLIER

2. Notification on claims

1. Supply goods

3. Loan extension

(discounted

receivables)

4. Loan

payment

Do

mestic

Inte

rna

tio

na

l

6

TYPE II : LINKAGE PROGRAM

• Corporate Risk • Financing to suppliers of

exporters (existing IEB clients / blue chip companies).

NO CLIENTS BUSINESS

SECTOR OPERATIONAL

AREA EXPORT DESTINATION TOTAL OUTSTANDING

1 Contractor Jakarta Asia, Europe IDR 3.000.000.000

2 Fertilizer trading Sulawesi, Kalimantan

Bangladesh, China, Egypt, Mauritius, Nepal, Pakistan, U.A.E, Uruguay, Venezuela, Vietnam

IDR 2.641.678.600

3 Fishery Sulawesi Thailand, USA, Singapore

IDR 6.301.375.424

4 Furniture Central Java China, Denmark, Singapore, Taiwan, USA

IDR 9.973.000.000

5 Fruits and Vegetables Jakarta, Maluku, Jawa Timur, Sulawesi

Thailand, USA, Singapore

IDR 2.678.828.340

TOTAL IDR 24.594.882.360

TYPE II : LINKAGE PROGRAM

Per May 2013

SME EXPORTER IMPORTER SME TRADER

/SUPPLIER

3. Supply Goods

BANK /

NBFI

1. Fund

2. Provide Loan

Do

mestic

Inte

rna

tio

na

l

8

• Financial Institution Risk • Financing to Financial Institutions that

have direct / indirect export oriented clients.

TYPE III : REFINANCING

NO CLIENTS BUSINESS

SECTOR OPERATIONAL AREA TOTAL OUTSTANDING

1 Finance Company

Bali, NTB, East Java, Jogjakarta, Kalimantan, Jakarta, Sumatera

IDR 201.180.805.769

2 Coffee Bean Trading Sumatera IDR 7.500.000.000

3 Plantation, Seaweed Jakarta, Maluku, Jawa Timur, Sulawesi

IDR 10.429.356.594

TOTAL IDR 219.110.162.363

TYPE III : REFINANCING

Per May 2013

TRADE FINANCE SERVICES

I. IMPORT FINANCING – UPAS LC/SKBDN In UPAS LC / SKBDN financing, customers get a deferred payment in accordance with the tenor of LC / SKBDN Usance issued. While the payment to the Beneficiary done by sight basis by Reimbursing/Refinancing Bank. II. EXPORT BILLS NEGOTIATION/DISCOUNT LPEI purchase on draft (notes) and / or complying presentation documents or under Issuing Bank’s Acceptance by making advance payments or agree to pay to the Beneficiary at the time of or before being reimbursed by the Issuing/Reimbursing Bank.

NO CLIENTS BUSINESS SECTOR

AREA EXPORT DESTINATION TOTAL VOLUME

1 Fishery Sulawesi USA, Italy, Australia USD. 81.900,00

TOTAL USD. 81.900,00

EXPORT BILLS NEGOTIATION

Per May 2013

• Industrial Efficiency and Pollution Control Phase II EUR 4,5 juta Project IEPC 2

• Investment in industrial efficiency or pollution control activities Purpose

• Some portion can be utilized as working capital

• Longer tenor for investment

• Production efficiency increase

• Environmental friendly industry

Benefit for SME

KfW FINANCING

Overseas

Buyer SME

Exporter

( Protection against Non Payment Risk of The Buyer)

Do

mes

tic

Inte

rnat

ional

3. Account Receivable

Protection

1. Export

2. Buyer Underwriting

6. PAY A CLAIM

B A N K

Protected Account Receivable is used as collateral to the Bank

4. LOAN

5. CLAIM

CREDIT INSURANCE FOR

ACCOUNT RECEIVABLE PROTECTION

CUSTOMER CREDIT INSURANCE FOR ACCOUNT RECEIVABLE PROTECTION

NO CLIENTS AREA EXPORT DESTINATION TOTAL POLICY OUTSTANDING

1 Cacao Tangerang

South Korea, Malaysia, Thailand, Hong Kong, Singapore, Cina, Taiwan, Singapore, Vietnam, Kenya, China

IDR 11.742.458.000

2 Coal Trader Kalimantan UK, US, Spanyol, Malaysia, South Africa, Bulgaria, Lithuania

IDR 8.963.000.000

3 Producer of Seaweed

Surabaya Germany IDR 24.815.000.000

TOTAL IDR 45.520.458.000

Per May 2013

To improve the capacity and the ability of SME to become a competitive company.

Technical assistance in managing the company, improving the quality of product, and managing business to support the export activities.

To assists the access to finance and the international trade.

Counseling and advisory services for supporting the export and import activities.

15

ADVISORY FOR SME

SME CLIENT FROM IEB ADVISORY PROGRAM

NO BUSINESS SECTOR

AREA ADVISORY PROGRAM

EXPORT DESTINATION

OUTSTANDING

1 Textile Pekalongan Workshop on Export Financing

Saudi Arabia, Dubai, Malaysia, Singapur, Thailand

IDR 7.180.000.000

2 Wood Semarang

Workshop on Export Procedures and Export Financing

US, China, Jepang, Australia, Europe

IDR 50.000.000.000

TOTAL IDR 57.180.000.000

Per May 2013

17

The experience, commitment and competency of The Trade Financing Institution

Regulation from the Government to support SME export

Capacity building for SME Client

Coordination & cooperation among Government agency and SME Trade Financing Institution

KEY DRIVERS TO SUCCESS SME FINANCING

18

THANK YOU