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IFC Partners with Bank BTPN to Promote Green Loans and Supply Chain Finance in Indonesia

Jakarta, Indonesia, December 16, 2019 —IFC, a member of the World Bank Group, is providing a four-year debt facility of $150 million to PT Bank BTPN Tbk. The proceeds of the facility will be used by the bank to expand green financing and increase lending to micro, small, and medium enterprises with a focus on two areas — addressing the financing gaps through supply chain finance and promoting lending to women-owned MSMEs.
MSMEs play a central role in Indonesia’s 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’s 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. In this context, IFC estimates that Indonesia’s green financing opportunities are around $274 billion between 2016 and 2030.
Meanwhile, based on its global expertise in green finance and supply chain finance, IFC will help Bank BTPN build capacity in green financing — a first for the bank, equip the bank to measure GHG emission reductions, and support the bank in scaling up its supply chain finance program. “Both green loans and supply chain financing are still at a very nascent stage in Indonesia. 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.
IFC has partnered with Bank BTPN 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.
"This investment is targeted to help women-owned MSMEs, using a two-pronged approach — supply chain finance and green financing — to create impact and boost the growth of small businesses. The facility will also demonstrate the viability of green financing, reinforcing the importance of standards and best practices to other financial institutions. Additionally, it will support the government's intention to establish climate finance as a major asset class,” said 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 IFC’s 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 FY19, IFC’s climate investments were spread across 93 deals, helping avoid an equivalent of 15.5 million tons of carbon dioxide emissions.
About IFC
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities where they are needed most. In fiscal year 2019, we delivered more than $19 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org .
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