SURABAYA - Bank Andara projected increase in financing to rural banks (BPR) and cooperatives in Java and Bali more than 100%, or reach Rp 270 billion from the current position of Rp 130 billion.

 

Business Development Director Bank Andara, Don Johnston mentioned there are still 30 million to 50 million people in Indonesia, who have not been served or haven’t been able to access banking directly.

Therefore, bank acquisitions of Bank Sri Partha embrace rural banks (BPR) as many as possible who have been working on the micro business sector in the region.

Until the end of 2010, bank who owned by foreign non-profit organization, is ready to allocate a loan fund to microfinance institutions (MFIs), especially rural banks and cooperatives of Rp 270 billion.

The position was experiencing significant growth, above 100% of the outstanding current recorded Rp 130 billion.

"During one year operation, 250 microfinance institutions in Jakarta, West Java and Bali have partnered with Bank Andara, Most of them are rural banks (BPR)”, said Don on the sidelines of a meeting with a number of rural banks (BPR), yesterday.

He hopes with expand to East Java, the total of rural banks (BPR) will increase.

"Our prediction for the number of rural banks (BPR) and cooperatives that use Bank Andara’s loans, and who put their money in the bank could reach 400 units."

 

Opened vast opportunities

According to him, the projection is realistic considering the survey results from an independent institution, almost all rural banks in East Java, with the number of 363 units, are relatively healthy.

Furthermore, most of them focus on lending to poor people and women.

To encourage the participation of rural banks (BPR), Bank Andara chooses not to plunge himself targeting the retail sector in the micro enterprises level.

Moreover, bank who headquartered in Denpasar promised to give the amount of special interest for rural banks (BPR), which is consistently working on micro-enterprises among the poor or women.

In general, bank is offering interest rates between 13,5% to 15%.

But it all depends on the ranking and performance of rural banks (BPR) concerned.

“Not all of the rural banks (BPR) require credit, even from 250 rural banks (BPR) only 160 rural banks (BPR) had asked for credit with an average of more than Rp 500 billion per bank with a tenor of three years," explained Don.

On the same occasion, Chairman Perbarindo of East Java FX Sugeng Notodihardjo said cooperation opportunities or known by linked programs between potential rural banks and commercial bank for development of micro enterprises sector in the region.

However, Sugeng reminded bank that provide loans to rural banks, do not offer interest rates too high.

He confirmed lending to micro enterprises spend greater operational costs, for example related to the lack of access to locations.

Therefore, offering a lower interest rate will encourage rural banks also to provide low interest rates to its clients.

"If the average interest rates of commercial banks 12%, I hope to rural banks (BPR) for example 10% to 11%," he said.

 

(Quoted from Bisnis Indonesia, Wednesday 7 July 2010)