Bank Indonesia (BI) Deputy Governor Mulyanaman D Hadad stated recently that the entry of foreign banks into the microfinance sector in Indonesia will have a positive impact in expanding the reach of financial services and that Indonesian banks should not be concerned. He commented that the increase of foreign banks into Indonesia’s microfinance sector will improve the competitiveness of local banks, and will bring capital money as well as knowledge and managerial skills to the sector. Additionally, a recent Asian Development Bank (ADB) publication also called for increased competition in rural and microfinance markets in order to enhance the capacity of the financial sector to provide long-term financing, one of the ADB’s strategic focuses for Indonesia. While the number or foreign banks that have recently begun operations in Indonesia was not reported, there are currently 30 foreign banks registered as either ordinary or associate members of The Foreign Banks Association of Indonesia.
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MICROCAPITAL STORY: Indonesia’s MBK Ventura, Egypt’s Al Tadamun, and Grameen Bank’s Nurjahan Begum Recognized at Grameen Foundation 2008 Awards
The achievements of the Grameen Bank‘s Nurjahan Begum, Indonesia’s Mitra Bisnis Keluarga (MBK) Ventura, and Egypt’s Al Tadamun were recognized on November 12, 2008 at the Grameen Foundation’s 2008 Awards in Washington D.C. The awards were held in conjunction with its annual Knowledge Sharing Roundtable discussion, which this year discussed the implications of the global financial crisis on microfinance. Nurjahan Begum received the Susan M. Davis Lifetime Achievement Award for her work in microfinance for over 30 years, including her efforts to organize women in Bangladesh’s poorest villages and leading the fight for the rights of disadvantaged women. MBK Ventura of Indonesia received the Excellence in Microfinance Award for its leadership its efforts to ensure that Indonesia’s poorest citizens receive financial services, and Al Tadamun of Egypt was awarded the Pioneer in Microfinance Award in recognition of its program to provide financial services to Cairo’s poorest women.
PIONEERS IN MICROFINANCE: Five Asian Pioneers: Mechai Viravaidya of Thailand, Anton Soedjarwo of Indonesia, Vijay Mahajan of India, Bambang Ismawan of Indonesia, and Karunawathie Menike of Sri Lanka
Microcapital has identified the following five Asian microfinance “pioneers,” individuals who have made long-standing contributions to the evolution and promotion of microfinance practices and/or technology in Asia: Mechai Viravaidya of Thailand, Anton Soedjarwo of Indonesia, Vijay Mahajan of India, Bambang Ismawan of Indonesia, and Karunawathie Menike of Sri Lanka. Below are short descriptons of the contributions of each:
MICROCAPITAL STORY: YAMIDA Opens First Microfinance Branches in Aceh Jaya, Indonesia in Partnership with the American Red Cross and the Grameen Foundation as Part of Ongoing Tsunami Relief Efforts
Yayasan Mitra Dhuafa (YAMIDA) will open its first microfinance branch offices in the Aceh Jaya district of Indonesia as a result of a partnership expansion between the American Red Cross and Grameen Foundation. The offices will be located in Lamno, Lhok Kruet and Calang, the most populated regions in Aceh Jaya. The American Red Cross and the Grameen foundation had previously collaborated in Indonesia in Banda Aceh, Pidie, Aceh Besar, Bireuen, Aceh Utara and Lhokseumawe districts of the province of Aceh. YAMIDA began operating as a microfinance organization in Aceh through support from the Grameen Foundation USA and Grameen Trust Bangladesh. Since 2005 the Grameen Foundation has provided USD 200,000 in funding, USD 160,000 as zero percent loans to clients and a USD 35,000 grant for operating expenses.
NEWS WIRE: United States and Indonesia: MicroFinance Transparency to Publicize Microfinance Institution Rates & Fees
Source: Business Week.
NEWS WIRE: Indonesia: Global Inflation Should Be “Wake-up Call” to Microfinance
Source: Jakarta Post.
MICROCAPITAL STORY: Mercy Corps Buys a Commercial Bank in Bali to Service the Microfinance Sector in Indonesia
Mercy Corps, a global relief organization, announced the creation of a ‘bank of banks’ (BoB), a commercial bank that will partner with other microfinance institutions (MFIs), in Indonesia. The MAXIS (Maximizing Financial Access and Innovation at Scale) program, developed by Mercy Corps to build BoB and provide technical asistance, received USD 19.4 million from Bill & Melinda Gates Foundation‘s Financial Services for the Poor initiative. The total capital supporting the creation of Indonesia’s first microfinance wholesale bank adds up to approximately USD 33 million, with funding from investors such as International Finance Corporation (IFC), a member of the World Bank Group, and the Hivos-Triodos Fund, a joint initiative of the Humanist Institute for Development Cooperation (Hivos) and Triodos Bank, based in Netherlands.
PRESS RELEASE: Microfinance Information eXchange (MIX) Opens Indonesia Office in Partnership with MICRA (Microfinance Innovation Center for Resources and Alternatives)
Source: Microfinance Information eXchange (MIX).
MICROCAPITAL STORY: Quick Centre Launches Website to Help Microfinance Institutions Handle Disasters, Funded by the German Development Agency (GTZ) and Bank Indonesia
The Quick Centre, a knowledge sharing platform for microfinance practitioners, went live in February 2008 with support from Bank Indonesia and Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ), the German development agency. The organizers of the Quick Centre were motivated by the difficulty of responding to the May 2006 earthquake in Yogyakarta, Indonesia. Their aim is to serve the larger development community by facilitating the exchange of existing documentation and organizational experiences related to the practice of microfinance in disaster situations. The site advertises best practices on post-disaster microfinance support measures, microfinance as a disaster preparedness tool and disaster management for microfinance institutions.
PRESS RELEASE: Allianz Life Indonesia Offers Islamic Microinsurance On Permanent Basis After Successful Pilot Phase
Source: Allianz.
NEWS WIRE: Indonesia & India: Biometrics Use Rising Among Asian Microfinance Institutions, Says BusinessWeek Wire Story
BusinessWeek reprinted the following from ZDNet Asia
MICROCAPITAL STORY: Citigroup, the Foundation for Development Cooperation (FDC), and the Banking with the Poor Network (BWTP) Oversee Program to Advance Microfinance Partnerships in Indonesia
A three-day microfinance conference put on by Citigroup, a private financial services company, the Foundation for Development Cooperation (FDC), a not-for-profit international development organization, and the Banking with the Poor Network (BWTP), a not-for-profit regional microfinance network, wrapped up in Jakarta, Indonesia on September 7. This event is part of a USD 570,000 grant given by the Citi Foundation to the FDC and BWTP earlier this year with the purpose of expanding microfinance services across ten Asian countries during 2007 and 2008.
MICROCAPITAL STORY: Indonesian Government to Invest USD 107.1 million to Expand the Reach of Microfinance in Rural Areas
According to the Ministry of Agriculture, The government of Indonesia anticipates to spend USD 107.1 million in 2008 to set up financial institutions in villages across the country to reduce poverty and unemployment.
MICROCAPITAL STORY: Permodalan Nasional Madani of Indonesia Issues USD 33 Million Worth of Bonds to Finance Microfinance Operations
PT Permodalan Nasional Madani (PNM), a state-owned enterprise in Indonesia that helps finance micro-finance institutions (MFIs), announces plans to issue bonds worth Rp 300 billion (USD 33 million) by the end of 2007. The proceeds will be lent to MFIs to allow them to provide loans for micro, small and medium enterprises (MSMEs) throughout the country.
Unitus Arranges Loan for MBK Ventura, an Indonesian Microfinance Institution, with The Dignity Fund and MicroCredit Enterprises
Unitus, a non-profit consultancy and venture capital firm, has recently announced a USD 1.2mm equivalent loan it has arranged for MBK Ventura, an Indonesian microfinance institution (MFI), 3 months after the organisation became a Unitus partner. The loan, structured in Indonesian rupiah, is made up of two USD 600,000 contributions from The Dignity Fund, LP, a microfinance fund based in California, and MicroCredit Enterprises, a non-profit organisation also based in California. Unitus have said that the loan is being provided at “an affordable interest rate” although avoided giving the exact rate.
US-Based Unitus Partners with Indonesian MBK Ventura to Expand Access to Microfinance
According to a Press Release, Unitus, a US nonprofit organization supporting microfinance internationally, reached a partnership agreement with MBK Ventura, the Indonesian microfinance institution formerly known as Ganesha. Unitus will provide financial support and consulting services to help MBK Ventura expand its client base to 240,000 borrowers. As of September of 2006, MBK has 25,623 active borrowers. Unitus will provide MBK Ventura with a USD 170,000 grant to support capacity-building projects such as technological improvements and staff training. Unitus will also take a seat on MBK Ventura’s Board.
Mark Headley of Matthews International Capital Management Mentions Indonesian MFI as Investment Opportunity
In a recent article in the International Herald Tribune, Mark Headley, president of Matthews International Capital Management in San Francisco pointed to the Indonesian microfinance institution Bank Rakyat Indonesia (BRI) as a potentially wise investment. The comment was made in reference to finding alternative emerging market investments outside of China and India.
Allianz Creates Microinsurance Project in Indonesia
Allianz has begun offering a microinsurance product with annual premiums of $0.66 to Indonesians. Following results of a study – commissioned by Allianz, German Technical Corporation, and the UN Development Program åö that pointed to there being high demand from low-income Indonesians for insurance, the banking and insurance behemoth decided to enter the sector. The product, named “Payung Keluarga”, or “family umbrella”, will be tested for one year before becoming permanent. Premium collection and claims administration for “Payung Keluarga” has been assigned to undisclosed microfinance lending institutions and nongovernmental organizations.
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