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Rights issue aims to expand MSME loans, says BRI
BRI is to expand its microfinance services in the MSME sector under a planned SOE holding company it is set to lead.
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Bank Rakyat Indonesia (BRI) president director Sunarso (behind glass) speaks about inter-stakeholder collaboration to drive local micro, small and medium enterprises at a Center of Reform on Economics virtual forum on July 15, 2020. (Photo courtesy of BRI)
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ublicly listed Bank Rakyat Indonesia (BRI) has explained that a planned rights issue is aimed at raising capital to strengthen its finances and expand microfinance services.
The government plans to create a state-owned-enterprise (SOE) holding company for lending to micro, small and medium businesses, many of which are currently under immense financial strain.
BRI is to head the venture through the acquisition of pawnbroking company Pegadaian and financial services SOE Permodalan Nasional Madani (PNM).
“The capital increase will be conducted no later than one year from the annual shareholders meeting on the rights issue,” BRI corporate secretary Aestika Gunarto told The Jakarta Post on Monday, referring to the shareholders meeting scheduled for July 22.
Citing an independent assessment, Frederik Rasali from Artha Sekuritas told the Post on Monday that Pegadaian was valued at Rp 48.7 trillion (US$3.37 billion) and PNM at Rp 6.1 trillion for a combined worth of Rp 54.8 trillion. He also confirmed news reports estimating the rights issue’s value as Rp 96.5 trillion.
“The capital increase can definitely further the bank’s goal to serve more of the unbanked population, considering that those three companies have long experience with MSMEs,” Frederik told the Post on Monday.
