In Washington, D.C.:
Ludi Joseph
Tel: 202 473 7700
Fax: 202 974 4384
E-mail: ljoseph@ifc.org

In Jakarta:
Nia Sarinastiti                      
Tel: (62-21) 5299-3001          
Fax: (62-21) 5299-3002        
E-mail: nsarinastiti@ifc.org          

Elvi Nasution-Schaefer
Tel: (62-21) 5299-3001
Fax: (62-21) 5299-3002
E-mail: eschaefer@ifc.org  


Washington, D.C./Jakarta, Indonesia, September 15, 2006—The International Finance Corporation, the private sector arm of the World Bank Group, has partnered with Sampoerna Foundation and PT Bank Internasional Indonesia Tbk (BII) to establish Indonesia’s first private financing facility for making student loans.  The project demonstrates how a philanthropic foundation can improve access to higher education for a significant number of students by using its resources more effectively.

With affordable student loans difficult to come by in Indonesia, the risk-sharing facility fills a real void in the market. The facility is expected to enable some 15,000 new students cover the cost of tuition and university entrance fees, and will provide the equivalent of 20,000 loans over three years at an average size of $1,000.

Compared with 20 percent of the student population in China and 34 percent across all OECD countries, less than 10 percent of young Indonesians are enrolled in higher education and less than 4 percent of those enrolled actually complete university studies.

IFC and BII are sharing the senior risk participation at $2.5 million equivalent each (with a possible total participation for each up to $10 million equivalent), while Sampoerna Foundation is providing expertise, knowledge, and networks in the education sector in Indonesia. BII will assume the role of fund provider and administrator of the loan portfolio. The facility will have a maximum term of seven years.

The Sampoerna Foundation sought IFC’s assistance in structuring a facility that would cover students and families from emerging middle class and disadvantaged backgrounds, especially those who receive partial scholarships and are unable to borrow the balance because of a lack of collateral.

Speaking at the signing in Jakarta, Lars Thunell, IFC executive vice president, said, “Access to education is critical to growth, and supporting the development of private sector education is one of IFC’s key strategic goals. We are proud of this partnership model – of teaming with a philanthropic foundation to help students improve their chances of gaining a university education.”

Elan Merdy, chief operating officer, Sampoerna Foundation, noted, “The project presents an excellent model for leveraging donor contributions and enables us to leverage our contribution in education funding for up to $20 million equivalent of student loans.”

According to Rudy N. Hamdani, director of BII, “We are very excited to be involved in a project in which the country’s first student loan scheme will open up tremendous higher education opportunities to well-qualified and deserving Indonesian students.”

Guy Ellena, IFC director for health and education, added, “IFC's experience in both structured finance products and higher education places it in a unique position to take the lead in structuring and pioneering this facility.”

The project was supported by the Swiss/IFC technical assistance trust fund which financed a student loan market study in Indonesia last year.  

About the Sampoerna Foundation

Sampoerna Foundation is a non-profit philanthropic organization dedicated to improving the education sector in Indonesia. The foundation has so far provided over 19,700 scholarships to young students. In 2005, Sampoerna received $250,000 of IFC funds for tsunami relief and was selected to represent the Freeman Foundation and other international and local donors. Sampoerna receives significant annual donations ($5.8 million in 2005) from institutional and corporate sponsors in Indonesia. In addition to providing scholarships, Sampoerna Foundation has also established numerous education improvement programs, such as Sampoerna Foundation United Schools Program, Sampoerna Foundation Teacher Institute, Sampoerna School of Business and Management – ITB, and Sampoerna Language Centre.

About PT Bank Internasional Indonesia Tbk

PT Bank Internasional Indonesia Tbk (BII) is one of the largest banks in Indonesia. As of June 2006 BII has an international network that comprises over 230 branches and 690 ATMs across Indonesia, as well as a banking presence in Mauritius, Mumbai, and the Cayman Islands. With a total customer deposit base of IDR 34.4 trillion and IDR 47.5 trillion in assets, BII provides a full range of financial services through its branch offices and ATM network, phone banking, and Internet banking channels. BII is listed on the Jakarta Stock Exchange and the Surabaya Stock Exchange and is active in small business, commercial, consumer, and corporate banking. BII provides products and services to medium and commercial enterprises and individuals with credit cards, mortgages, deposits, lending, and wealth management services. Corporate clients are provided with services in trade finance, cash management, lending, custody, and foreign exchange.

About IFC
The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services. For more information, visit www.ifc.org.