Citi forms microfinance partnership in Indonesia
Indonesia, August, 09 2011 -
Citi, Opic and Bank Danamon announce the closing of a $20 million term loan fund for a microfinance programme.
Citi Indonesia has partnered with the Overseas Private Investment Corporation (Opic) to support the growth of Bank Danamon’s microfinance programme, Danamon Simpan Pinajm (DSP), with a $20 million term loan. According to Citi, the loan is the first from itself and Opic for the microfinance sector in Indonesia and is part of a $250 million joint global initiative to support microfinance lending in emerging markets.
“Microfinance has tremendous potential not only to help tackle unemployment and promote financial access in Indonesia, but also as one of the engines of the country’s economic growth,” said Kunardy Lie, head of global banking at Citi Indonesia. “Through Danamon Simpan Pinjam, which focuses on small traders, micro entrepreneurs and the value chain for entire businesses, we are confident that it will come to a progressive programme that enables small businesses in Indonesia to grow further.”
The term loan also aims to promote the financial inclusion of micro entrepreneurs and small businesses through the country. Indonesia’s Bank Andara recently partnered with Fundamo to launch a new financial services network to offer financial services to more than 40 million unbanked individuals in the country.
“Indonesia has been a leading centre for microfinance for decades, and the scale and diversity of its contribution to financial inclusion is evidenced by the expansion of Danamon Simpan Pinjam’s programme supported by this facility,” said Bob Annibale, global director of microfinance at Citi.
According to Elizabeth Littlefield, president and chief executive at Opic, Indonesia is poised for significant economic growth. Enabling micro entrepreneurs to play a part in the growth will help ensure the country has a strong foundation.
“This loan will strengthen our commitment in accelerating expansion in micro financing through Danamon Simpan Pinjam business,” said Minhari Handikusuma, director for micro business at Bank Danamon. “This year we will open around 157 new DSP outlets across Indonesia to establish a total of more than 1,200 DPS outlets to better serve our customers and further provide financial access to the society, particularly our potential customers who live surrounding the traditional markets.”
Citi’s microfinance business supports more than 100 microfinance institutions, networks and investors in more than 40 countries. Bank Danamon operates more than 25,000 automated teller machines and 2,300 branches and points-of-sale throughout Indonesia.