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MSMEs Credit in Indonesia
The International Guarantee Seminar - 2015
Irianto
Senior Executive Vice President
PT. BANK RAKYAT INDONESIA (Persero), Tbk.
OUTLINE
1. Huge Domestic Market …………………………………………………….....1
Indonesia GDP …………………………………………………….……………………………. 2
Banking Penetration …………………………………………………….…………………… 3
Financial Literacy & Inclusion …………………………………………………….……… 4-5
MSMEs Profile ………….………………………………………………….…………………… 6
2. Key Success Factor in Serving MSMEs …………………………………..7
Outreach ……………………………………………….…………………………………………...8
Sustainability ……………………………………………….……………………………………. 9
Social Impact ……………………………………………….……………………………………. 10
3. Bank BRI ......................…………………………………………………………11
BRI Networks ……………………………………………………………………………………… 12
The Leader of MSMEs Bank ……………………………………………….………………. 13
BRI Innovation ……………………………………………….…………………………………...14-17
Kredit Usaha Rakyat ……………………………………………….………………………….. 18
HUGE DOMESTIC MARKET
HUGE DOMESTIC MARKET – Indonesia GDP
The largest economy in ASEAN, one of the largest in the world
Purchasing Power Parity (PPP),
Billions of international dollars, 2013
United States
Gross Domestic Product (GDP)
Billion USD, 2012
16,800
China
16,158
India
6,774
Japan
4,624
Indonesia
Thailand
662.6
Malaysia
506.7
Philippine
431.3
Germany
3,493
Singapore
331.9
Russian Federation
3,461
Vietnam
325.9
Brazil
3,012
Myanmar
90.9
France
2,437
Cambodia
37.3
Indonesia
2,388
Brunei
22.4
United Kingdom
2,320
Laos
19.5
9
1
1,237.0
Source: World Bank (World Development Indicators), CIA World Fact Book
2
HUGE DOMESTIC MARKET – Bank Penetration
Indonesia banking penetration is lower compared to other ASEAN-5,
giving opportunity for Bank to grow
Loan to GDP Ratio
(%) -2014
Deposit to GDP Ratio
(%) -2014
155.9
153.4
141.1
123.1
106.2
95.8
51.7
38.2
Singapore
Malaysia
38.9
36.4
Thailand Philippines Indonesia
Malaysia Singapore
Thailand Philippines Indonesia
Source: CEIC
3
HUGE DOMESTIC MARKET – Financial Literacy & Inclusion
Literacy and financial inclusion levels of Indonesian society in various financial industry
is still relatively low
Capital Market
Pension Funds
Finance Companies
0.11%
3.79%
1.53%
7.13%
6.33%
9.80%
Mortgages
5.04%
14.85%
11.81%
Insurance
81,93%
Banking
17.84%
57.28%
21.80%
Inclusion
Well literate
Source: Indonesia Financial Services Authority, 2014
4
HUGE DOMESTIC MARKET – Financial Literacy & Inclusion
Literacy
18.67%
14.70%
12.07%
7.41%
4.95%
2.24%
Capital
Market
Pension
Funds
Finance
Companies
Mortgages
Insurance
Inclusion
Banking
53.43%
0.04%
1.03%
Capital
Market
Pension
Funds
4.32%
4.70%
Finance
Companies
Mortgages
Literacy low-income
people is dominated
by the banking
sector. This is also
reflected in financial
inclusion while
access to non
banking sector is still
relatively low
8.53%
Insurance
Banking
Source: Indonesia Financial Services Authority, 2014
5
HUGE DOMESTIC MARKET – MSMEs Profile
MSMEs Share of Total
Businesses
Employment on The
Activities of MSMEs
0,01%
4,09%
The Portion of Bank Lending
(Sept’14)
3,74%
2,95%
5,44%
2,84%
8,90%
99,99%
MSMEs
Commercial
Micro, small and medium
enterprises in Indonesia
reached 56.53 million units,
which is currently 99.99%
market share of all business
activities in Indonesia
81,93%
90,12%
Micro
Small
Medium
Commercial
From 56.53 million units of
micro, small and medium
enterprises, 55.86 million units
or 98.81% are micro business
unit which absorb 90.12% of
the workforce in Indonesia
Source: Indonesia Financial Services Authority (OJK), 2014
Non MSMEs
Micro
Small
Medium
Although, total Micro Business
is very large, but only 3.74%
of them have access to the
financial services
6
Key Success Factor in Serving MSMEs
Key Success Factor in Serving MSMEs – Outreach
Spreading all over 17,000 islands
Most of MSMEs are located in rural & remote area
Limited infrastructure
Outreach / Accessibility
Outreach related to bank’s ability to deliver financial
service to micro, small, and medium enterprises
(MSMEs). MSMEs are spreading all over Indonesia that
consist of 17,000 islands and most of the MSMEs are
located in rural and remote area. It needs financial
services to support its business activities.
Sometimes infrastructure and geographical location are
obstacles for the bank to reach the MSMEs. However,
Bank should present close to the MSMEs community
which tends to be in rural and remote areas.
8
Key Success Factor in Serving MSMEs - Sustainability
A bank needs to be able to finance itself (self sufficient) by
generating sustainable profit so that the bank can maintain
its commitment to continue serving MSMEs. Moreover, the
profit can support the bank to do innovative product
development to increase service quality or even offer an
innovative product to help MSMEs boost their performance
2014’s
2011’s
1960’s
9
Key Success Factor in Serving MSMEs – Social Impact
The existence of microfinance program should give a positive an
effect of significantly, both on financial and social aspects
84.84
Micro Credit Impact
2.2x
38.4
24.72
20.4x
1.21
2009
2012
(IDR Million)
Asset
Turnover
The latest research conducted by independent research
institution (University of Indonesia) in 2012 on micro credit
showed that the presence of micro credit has a significant
impact in terms of rising turnover (2.2x) and assets (20.4x)
10
BANK BRI
BANK BRI – BRI Networks
E-Channel
10,519,36
users
3,904,644
users
Moving/Automobile
Channel
Conventional Channel
414,050
Calls/month
153,786
21,215
5,306
2,531
Mobile
Banking
980
610
Internet
Banking
586
426
463
Phone
Banking
EDC
(Merchant
EDC, Brilink
Agent EDC,
Office EDC)
55
2
1
ATM
CDM
LOW
Hybrid
Lounge
E-Buzz
Teras
Keliling
BRI
Teras
Kapal
BRI
Cost per Transaction
Teras
BRI
Cash
Offices
BRI Unit
Sub
Branch
Branch
Offices
HIGH
12
BANK BRI – The Leader of MSMEs Bank
(IDR Trillion)
Description
2010
2011
2012
2013
2014
Sept. 2015
Total Assets
398.4
456.5
535.2
606.4
778.0
775.8
- Loans
247.0
283.6
348.2
430.6
490.4
519.0
Total Costumer Deposits
328.6
372.2
436.1
486.4
600.4
611.3
77.1
75.6
78.8
78.0
89.1
109.6
- Saving Deposits
125.2
152.5
182.6
210.0
232.4
233.7
- Time and Certificate Deposits
126.3
144.1
174.7
198.4
278.9
268.0
Tier I Capital*
27,8
38,2
51,6
66,0
82,1
86,7
Net Profit
11,5
15,1
18,5
21,2
24,2
18,3
- Demand Deposits
MSMEs’ Credit Domination
131.2 26.8%
110.2
43.9
203
17.8%
82.2%
56.3
19.8%
227.4
80.2%
87.8
25.2%
260.4
74.8%
139.7
26.9%
379.2
73.1% Loan Outstanding
25.6%
359.2
320.3
Sustainable
performance to
support
sustainable
business
74.4%
73.2%
Non - MSMEs
MSMEs
(IDR Trilion)
2010
2011
2012
Note: numbers state in this presentation are bank only
2013
2014
Sept. 2015
13
BANK BRI – BRI Innovation
• “Teras BRI” was invented by Bank BRI to embrace
financial inclusion by reaching out deeper
community in rural and remote areas across
Indonesia.
• Today, BRI operates 3.155 “Teras BRI” throughout
Indonesia. “Teras BRI” boosts bank’s performance
especially on microbanking segment.
Teras BRI (Outlet)
2,128
2,671
3,067
3,155
2014
Sep-15
1,304
617
2010
2011
2012
2013
14
BANK BRI – BRI Innovation
Coverage Areas of Teras BRI Kapal
“Banking Services in
Archipelago”
SERVING FISHERMEN AND COASTAL
COMMUNITY
Archipelago of
Kepulauan Seribu
(Thousands Island)
Area: ± 10,8 km2
land dan ± 7000 km2
waters
Population : ± 21.554
people (BPS, 2011)
Main industry: fishing
& tourism
Coverage Areas of
Teras BRI Kapal:
Untung Jawa island,
Tidung island,
Pramuka island,
Panggang island,
Kelapa island, and
Harapan island
BBC NEWS
http://www.bbc.com
/news/business34079633
15
BANK BRI – BRI Innovation
Number of BRILink Agents
Number of BRILink transactions
(agent)
is utilization of BRI’s e-banking
infrastructure by third parties
(BRILink Agent) through fee
sharing scheme
(million)
13.2
35,955
32,483
24,700
27,643
6.77
5.96
2.34
Des-14
Mar-15
Juni-15
Sep-15
Des-14
Mar-15
Juni-15
Sep-15
BRILink Agents Location
Sumatra
Agen: 22.5%
Trx: 29.8%
Mid & East Indonesia
Agen:20,4%
Trx:23,2%
Java
Agen:57,1%
Trx: 47%
source: BRI’s publication
16
BANK BRI – BRI Innovation
Specification:
Weight
: +/- 3.500 kg
Number of transponder : 45
Coverage : Indonesia, ASEAN,
Asia Timur Laut, part of Pacific
and West Australia
• Increasing service quality (service level agreement).
• Increasing technology reliability.
• To reach the unreacheable.
17
BANK BRI – Kredit Usaha Rakyat (KUR)
KUR (2007-2014)
KUR
KUR (70% Guaranteed Scheme)
Realization
Number of BRLink transactions
Costumer
Plafond
(year)
(million)
(IDR trillion)
2007
0.002
0.3
2008
1.65
9.31
2009
0.67
4.00
2010
1.35
9.13
2011
1.71
16.80
2012
1.76
19.78
2013
2.14
27.70
2014
2.27
30.00
TOTAL
11.55
117.00
KUR (2015)* – New
KUR
(year)
- Mikro (< IDR 25 Million)
- Ritel (> IDR 25 – 500 Million)
November 4th 2015
Realization
Costumer
Plafond
(thousand)
(IDR trillion)
440
6.40
5
0.87
445
7.27
*launced since August 18th 2015
18
Thank You