Indon CB cites SB Corp

The Central Bank of the Republic of Indonesia (Bank Indonesia) has expressed satisfaction in the transparency of the credit guarantee system of the Small Business Guarantee and Finance Corp. (SB Corp.) with its partner financial institutions.

Bank Indonesia, on a recent study tour in the country, is considering the adoption of SB Corp.’s credit guarantee system as a benchmark to establish its own guarantee system for Indonesia’s small and medium enterprises (SMEs).

SB Corp.’s guarantee system model was chosen by Bank Indonesia for its impressive track record in providing successful guarantees to SME projects.

"We are impressed by the smooth operations of the guarantee system between SB Corp. and its partner banks. The terms and conditions and operations are transparent. This must be the reason why almost all of the guaranteed accounts of SB Corp. are successful," said Mr. Ardiansyah, Bank Indonesia’s bank regulations bureau manager.

In addition, Bank Indonesia also lauded the SME Financing model of SB Corp., which categorizes SMEs based on their bankability, financial needs and the appropriate intervention to be made.

SB Corp. classifies SMEs as non-bankable, near bankable, and bankable. From these classifications, specific financial intervention is provided like direct financing for non-bankable, credit guarantees for near bankable and wholesale funding for the bankable SMEs.

"Our credit guarantee system is basically a scheme that bridges the gap between the SMEs which are not able to meet the collateral requirements of the formal banking sector.