Mainstreaming Microfinance - Bank Andara
Micro, small and medium-sized businesses employ 97.3 percent of Indonesia’s working population. Their growth is often limited by a lack of finance or even basic banking services. IFC’s microfinance and SME Banking programs help banks build new business models to deliver a range of financial services to smaller businesses and other underserved clients in Indonesia.
The ‘Bank of Banks’ – formally known as Bank Andara – is Indonesia’s first microfinance wholesale bank. It specializes in providing financial services and products to microfinance institutions across Indonesia, especially those in rural areas.
IFC has funded 20 percent of Bank Andara’s equity base and provides advisory services to help with branding, marketing, product development and identifying potential clients among microfinance institutions. Bank Andara’s support will allow rural microfinance institutions to expand their client base and offer a much broader range of products and services, including micro insurance and electronic banking.
Bank Andara is expected to serve and support nearly 2,000 rural banks and other microfinance institutions and bring a range of financial services to 3 million clients in its first three years.
Simplifying Licensing in Jakarta
Jakarta is Indonesia’s economic epicenter and a gateway for much business that enters the country. The city, which attracts billions of dollars in foreign investments, is collaborating with IFC on a two-year program to streamline the city’s business registration and licensing procedures.
IFC will bring its global and Indonesian experience to help Jakarta identify problem areas that cause lengthy business registration and licensing processes. IFC will work with Jakarta to develop lasting solutions that create more transparent, faster and more consistent licensing services. This experience will provide a template that can be used as a model for municipalities and provincial governments across the country.
Promoting Transparency in Infrastructure Transactions
Over 70 million Indonesians currently lack access to electricity. They stand to lose out on the opportunity to contribute to, and benefit from, the economic revival. With power demands increasing at around 8 percent per year, Indonesia is faced with a looming power crisis.
IFC is advising PLN (the government-owned electricity company) on transaction preparation and a competitive selection process for a coal-fired Independent Power Production (IPP) project in Central Java with a capacity of up to 2 X 1000 MW. The Central Java IPP Project is one of the Government’s ten model projects to be implemented as model Public-Private Partnerships (“PPPs”).
IFC participation will help to strengthen the project by developing a demonstration transaction that incorporates international best practice and transparency. Mobilizing private participation in Indonesia’s electricity sector will improve access for the poor (the goal is an 80 percent electrification ratio by 2012), augment service capacity and support economic development. Furthermore, it will provide fiscal space for the Government of Indonesia to make additional resources available for its programs.
