JAKARTA (TheInsiderStories) – International Finance Corporation (IFC) gives a four-year debt facility of US$150 million to local lender, PT Bank BTPN Tbk (IDX: BTPN). The proceeds will be used by the bank to expand green financing and increase lending to micro, small, and medium enterprises (MSMEs).
MSMEs play a central role in Indonesia’ economy, employing 89 percent of the private sector workforce and contributing 60 percent to the gross domestic product. Yet, approximately 51 percent of MSMEs have limited or no access to finance, leading to a gap of approximately $166 billion per year.
Additionally, a key segment of this market — women-owned MSMEs — is underserved. According to IFC’ MSME Financing Gap Study (2017), Indonesian women-owned SMEs face a $21.2 billion financing gap.
As an archipelago nation and following decades of rapid carbon-intensive growth, Indonesia is vulnerable to climate change impacts. Green financing is therefore critical to help the country meet its greenhouse gas emission reduction targets — 29 percent by 2030.
IFC estimates that Indonesia’ green financing opportunities are around $274 billion between 2016 and 2030. Based on its global expertise in green finance and supply chain finance, IFC will help Bank BTPN build capacity in green financing.
“With the vision to make a difference in the lives of millions, we are pleased to partner with a strong multilateral institution to fulfill the growing need and reduce the demand gap for green loans and supply chain financing,” said Ongki Wanadjati Dana, President Director of Bank BTPN in an official statement released on Monday (12/16).
Both has partnered since 2009 to broaden financial inclusion in Indonesia. With this project, Bank BTPN is expected to increase its outstanding loans to women-owned MSMEs and loans to women borrowers.
“It will support the government’ intention to establish climate finance as a major asset class,” adds by Azam Khan, IFC country manager for Indonesia, Malaysia, and Timor Leste.
Supporting sustainable development through green finance and reducing poverty through financial inclusion is one of the agency’ top priorities in Indonesia. Since 2005, IFC has provided more than $24 billion in long-term financing for climate-related projects in addition to nearly $19 billion in core mobilization.
In 2019, IFC’ climate investments were spread across 93 deals, helping avoid an equivalent of 15.5 million tons of carbon dioxide emissions.
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