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tate-owned investment firm PT Permodalan Nasional Madani (PNM) in its 2012 year-end financial report, has credited its 45.9 percent year-on-year profit jump to the growing economy and its affect on micro-businesses and their demand for micro-credit.

In the report, the company announced that its revenues rose by 30.7 percent year-on-year to Rp 860.5 billion (US$88.6 million) from Rp 658.3 billion. This pulled up last year’s annual profit to Rp 70.3 billion, an increase from the Rp 48.2 billion made in 2011.

Likewise, net profits climbed 33.5 percent to Rp 41.5 billion year-on-year from Rp 31.1 billion collected throughout 2011.

Parman Nataatmadja, president director of PNM, attributed the growth in its top line and bottom line numbers to proceeds flowing from the firm’s Micro-Credit Service Unit (ULaMM).

This unit, which disburses micro-credit loans to micro, small and medium enterprises, earned Rp 785 billion from interest, contributing 91.2 percent to overall revenues.

The revenue the unit earned by the end of last year was 40.6 percent more that the amount the unit made throughout 2011.

This year, the firm previously said, they expected new loans to increase by 34.8 percent to Rp 3.1 trillion as the firm widened the scope of its micro-credit business. The firm handed out Rp 2.3 trillion in new loans last year.

According to Parman, the unit’s climbing revenue indicated that the firm was experiencing an “on target” financial turnaround, he adding that external and internal factors affected this turnaround.

“The positive macro-economic conditions, aside from the out network-expansion strategy, have pushed our business forward in the last year,” he said.

This year the firm plans to set up 20 clusters, four branches and three sub-branches, in addition to 100 micro modal services units, in order to reach out to more micro as well as small and medium enterprises (SMEs).

Parman pointed out that the provision of financial services to SMEs remained a highly potential, yet largely untapped, business opportunity.

The Central Statistics Agency (BPS) estimated that 4.5 million micro to medium enterprises were in operation in the country. However, the Cooperatives and Small and Medium Enterprises Ministry has said that 70 percent of these business entities — a majority falling under the micro category — was considered not viable or un-bankable business-wise.

Parman added that PNM would maintain its focus on providing loans to micro-businesses, acting as an alternative to money lenders and banks. He said the firm would acquire clients by offering interest rates “higher than that of banks, but still lower than those set by money lenders”.