B

ank Sri Partha, a local bank based in Bali, officially transformed into Bank Andara Monday after four international investors injected US$5 million in additional capital.

The investors - Mercy Corps of United States, the World Bank's private arm International Finance Corporation (IFC), the Hivos-Triodos Fund (HTF) and the Netherlands-based Cordaid - have contributed 42 percent, 20 percent, 17 percent and 13 percent respectively to additional capital.

"We also have changed our business focus from retail into wholesale banking with a priority on assisting microfinancial agencies such as cooperatives, rural banks and rural credit agencies," Andara CEO Paulus Wiranata told reporters during the launching of the new bank.

After the injection, Andara's capital has reached Rp 135.9 billion (US$12.19 million). Paulus is optimistic that will be increased to Rp 175 billion in the next two months.

"We have expected our capital will increase further to Rp 275 billion in 2010 because our investors will be ready to give the support."

Paulus also said that he expected to raise Rp 300 billion more from third party funds (DPK). "There are several investors planning to add more money for us," he said, refusing to name names.

He said that the bank, through microfinance institutions, would help people access banking services. It was targeting to channel its credits through at least 200 out of 40,000 microfinance institutions in Indonesia, particularly those operating in Java and Bali.

"At the beginning, we will allocate Rp 300 billion to be channeled *via on lending* to one million customers in the next three years," Paulus said.

According to Paulus, the microfinance sector here was among world's largest with some 40,000 microfinance institutions, serving more than 40 million people.

"Millions of people are finding it difficult to access banking services and we are trying to help them by providing small loans," Paulus said.

Head of Advisory Services IFC Indonesia Brigit S Helms said that her institution was supporting Andara because its objectives were very similar to IFC's, helping less fortunate people by providing access to finance.

"This is our opportunity to invest indirectly to people through microfinance institutions," she said.

Besides providing credits, the bank also provides innovative financial services, including ATM networks, mobile banking services, remittance services and micro-insurance to rural banks and other institutions throughout the country.