ASEAN KEY DESTINATIONS
BNI eyes boost in SME segment through govt-loans
State-owned lender Bank Negara Indonesia (BNI) expects that a larger role in a government-backed loan program this year will help boost growth in its small and medium enterprise (SME) segment, an executive has said.
BNI business banking II director Sutanto said the government had allocated temporary loan targets for banks participating in the micro credit program (KUR) for 2016, in which BNI was expected to disburse loans worth Rp 11.5 trillion (US$825.8 million) from a nationwide target of Rp 100 trillion.
BNI’s target in 2016 was three times higher than the Rp 3 trillion of KUR loans allocated for the bank last year, prompting optimism on its growth in the SME segment, he said.
“Last year, the KUR contribution to our SME portfolio stood at only 0.5 percent. However, with our KUR target increased to Rp 11.5 trillion this year, it will boost growth in our SME loans,” Sutanto said in Batam, Riau Islands, during a video conference at BNI’s headquarters on Friday.
The bank has put its SME portfolio, along with corporate and state-owned enterprise loans, in a division called “business banking”, which differs from retail and consumer lending.
As of September 2015, BNI had booked Rp 46.3 trillion in medium-segment loans, increased by 21.1 percent year-on-year (yoy) from Rp 38.3 trillion in the same period a year earlier.
Meanwhile, the bank’s small-segment loans decreased slightly by 0.2 percent yoy to Rp 38.9 trillion during the first nine months of 2015, from 39.03 trillion in the same period of 2014.
Small and medium loans contributed 15.1 percent and 12.7 percent, respectively, to BNI’s overall lending of Rp 307.1 trillion by the end of September 2015.
With the current target, Sutanto said KUR loans in 2016 would contribute almost 20 percent to BNI’s SME portfolio, in which small and medium loans were expected to grow by 20 percent and 12 percent, respectively, this year.
In 2015, BNI disbursed Rp 3.04 trillion of KUR loans to more than 12,200 debtors concentrated in Java, Bali and Sumatra, with about 20 percent located in eastern Indonesia, such as East Nusa Tenggara, Maluku and Papua.
“We are planning to increase by 10 percent the portion of our KUR disbursement to eastern Indonesia, to make it 30 percent this year,” Sutanto said, adding that BNI was expecting to disburse KUR loans to 46,000 to 50,000 debtors this year.
In order to achieve the target, Sutanto said BNI was establishing 75 to 100 new outlets nationwide, so that it would have a total of 250 outlets to disburse its KUR loans this year.
Sutanto said the bank would also add 300 to 400 account officers with specific expertise in KUR loans, as it employed 1,200 people last year, most of whom specialized in higher segments of lending.
As BNI has minimal expertise in micro lending, Sutanto said the bank was considering partnering with rural banks (BPR) on a linkage program to disburse the micro segment of KUR loans.
“We will also deploy our branchless banking agents and build partnerships with local communities, such as wholesale traders in regions,” he said.
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