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IFC partners with Danamon to support SMEs in Indonesia
The International Finance Corporation (IFC), a member of the World Bank Group, signed a loan agreement today for up to US$75 million with Bank Danamon
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T
he International Finance Corporation (IFC), a member of the World Bank Group, signed a loan agreement today for up to US$75 million with Bank Danamon.
The loan will fund lending and help create business opportunities for Indonesian small and medium enterprises (SMEs), which are crucial contributors to the country's economic growth but have limited access to finance.
SMEs comprise nearly 55 million units in Indonesia, but just 30 percent have access to finance. IFC's loan will help support their growths by leveraging Danamon's extensive SME-focused financial and banking services and its vast geographical reach, including frontier areas in eastern Indonesia.
'We feel strongly that this long-term cooperation proves how Danamon and IFC share the objective of enhancing Indonesia's economic growth,' Danamon President Director Henry Ho said in an official release on Wednesday.
'Indonesia has 55 million SMEs that provide up to 15 million jobs, so this cooperation will improve the welfare of Indonesians in line with Danamon's vision of caring and enabling millions to prosper.'
The loan is IFC's second investment in Danamon, following a 2006 senior loan of $150 million to fund micro and SME segments. The loans underscore IFC's and Danamon's mutual commitment to improving access to finance for micro businesses and SMEs, and strengthening financial inclusion.
'SME lending plays an important role in poverty alleviation,' Sarvesh Suri, IFC's Country Manager for Indonesia, said.
'Danamon has significant SME reach and our investment will allow it to further support the development of Indonesian SMEs.'
The investment is in line with IFC's Indonesia strategy of strengthening the capacity of financial institutions to better serve SMEs and promote local employment by focusing on viable institutions that can scale up and respond to unmet demand.
