Jakarta, August 12, 2021 — As many as 5,000 Indonesian micro-retailers, the majority led by women, are set to gain greater access to finance and modernize their business operations through an innovative pilot initiative providing working capital support for a key sector at a time when the economy is being hit hard by the COVID-19 pandemic.
IFC, a member of the World Bank Group, has partnered with Mastercard, Coca-Cola Europacific Partners Indonesia (CCEP Indonesia) and leading emerging market B2B e-commerce platform N-Frnds to develop and pilot an integrated digital payments and scalable financing solution that leverages the relationship between fast moving consumer goods companies (FMCG) and distributors, wholesalers and micro-retailers, incentivizing micro-retailers to digitize transactions. The financing solution is based on a first of its kind consignment program for micro-retailers in emerging markets, enabling them to build up a credit history, giving them better access to finance and empowering them to sustain and grow their business, even during these difficult times.
"Micro-retailers play a critical role in Indonesia, providing jobs and reaching people and places large retailers cannot. But their growth and survival are hampered by a lack of access to finance that is exacerbated by the COVID-19 pandemic," said Rana Karadsheh, IFC Regional Industry Director Manufacturing, Agribusiness and Services. "This partnership will provide much-needed finance at a critical time while piloting an innovative approach to supporting micro-retailers, including helping them to modernize."
While the initiative is set to be initially rolled out across Indonesia's main island of Java, it is seen as having broader implications for the largely unbanked micro-retailer segment that includes an estimated 3.5 million small retail shops, restaurants, and cafes - known in Indonesia as warungs - in operation across the country. Micro-retailers represent 60 to 70 percent of Indonesia's retail sector, but financial institutions face challenges in serving them due to insufficient data on financial performance and credit history. Rejection rates by financial institutions average 45 percent for micro, small, and medium enterprises compared to 17 percent for corporates.
"Access to finance has been a major obstacle for MSMEs in Indonesia, and the COVID-19 pandemic has created an even more pressing need to develop solutions and bring together expertise that would help these micro-retailers get digitized, get capital, and get paid," said Safdar Khan, Division President, Southeast Asia Emerging Markets, Mastercard. "The partnership with N-Frnds, CCEP Indonesia and IFC will help ensure these micro businesses can continue to drive forward a sustainable and inclusive economic recovery," he said, adding that the majority of the micro-retailers that stand to benefit from this initiative are women-led. "Driving forward women's economic advancement isn't just of benefit to them, but for the whole economy."
The launch of this initiative comes after the Mastercard Women's Entrepreneur Development Index 2020 showed that compared to the previous year, Indonesia had made more progress in advancing entrepreneurialism among women than any other Southeast Asia nation.
"Coca-Cola Europacific Partners Indonesia is excited to partner with IFC, N-Frnds and Mastercard which will allow the company to provide credit facilities to smaller outlets in Indonesia," a spokesperson for CCEP said. "Through the partnership, the ability to select credit options that are suitable for the customers will allow these smaller outlets to grow their businesses and be part of the value ecosystem that CCEP Indonesia is creating among the traditional trade outlets."
"This partnership is a true game-changer in the market, driving efficiencies throughout the value chain and enabling micro-businesses to benefit from financial solutions that were previously well beyond their reach," said Dorron Mottes, CEO and founder of N-Frnds. "This will provide a financial life-line to the millions of small businesses who have been severely impacted by the current pandemic and now have an opportunity to not just survive but also to grow their business."
IFC, Mastercard and N-Frnds have jointly committed over $2 million to fund the pilot, with IFC contributing $750,000, while CCEP Indonesia is providing valuable consignment terms, as well as discounts, and promotions channeled through N-Frnds. The initiative is expected to unlock growth for micro-retailers and create business opportunities for FMCG companies and banks supporting the scaling and replication of this innovative financing solution.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.
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About Mastercard
Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. Our decency quotient, or DQ, drives our culture and everything we do inside and outside of our company. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all. www.mastercard.com.
About N-Frnds
N-Frnds has developed the world's first proven big data driven, B2B commerce platform for the last mile in emerging markets, that digitizes the entire value chain, combining commerce and trade finance. N-Frnds has strategic partnerships with the world's leading consumer brands and financial services companies including Coca Cola, Unilever, Friesland Campina and Axa Insurance.
The N-Frnds Technology platform has been proven at scale, with over 20 million users, 21 patents and was selected by both Mastercard and Microsoft as their last-mile distribution platform for reaching small and micro-businesses in emerging market value chains. N-Frnds has established operational networks in Indonesia and Philippines and is in process of expanding to Vietnam and across the region.
About Coca-Cola Europacific Partners
Coca-Cola Europacific Partners is one of the leading consumer goods companies in the world. We make, move and sell some the world's most loved brands – serving 600 million consumers and helping 1.75 million customers across 29 countries grow. We combine the strength and scale of a large, multi-national business with an expert, local knowledge of the customers we serve and communities we support.
Coca-Cola Europacific Partners Indonesia operates eight manufacturing facilities in Sumatra, Java, and Bali employs a direct workforce of more than 5,500 people and distributes a million cases of refreshing drinks to more than 450,000 outlets across the nation. We are also committed to make a distinct and positive contribution to the areas we operate, by running various initiative, such as: Bali Beach Clean Up, support Green School (Adiwiyata School) program, Coca-Cola Forest, and Waste Bank Development Program in several cities.
Coca-Cola Europacific Partners is listed on Euronext Amsterdam, the New York Stock Exchange, London Stock Exchange and on the Spanish Stock Exchanges, trading under the symbol CCEP. For more information about CCEP, please visit www.cocacolaep.com & follow CCEP on Twitter at @CCEP.
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