Muamalat SME (IFC-33884)

Regions
  • East Asia and Pacific
Where the impacts of the investment may be experienced.
Countries
  • Indonesia
Where the impacts of the investment may be experienced.
Financial Institutions
  • International Finance Corporation (IFC)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Hold
Bank Risk Rating
FI
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Voting Date
Apr 24, 2014
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower
BANK MUAMALAT INDONESIA, PT TBK
The holder of the loan, grant, or other investment.
Sectors
  • Finance
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, etc.
Investment Amount (USD)
$ 60.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Project Cost (USD)
$ 60.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please see updated project documentation for more information.
Primary Source

Original disclosure @ IFC website

Updated in EWS Oct 6, 2018

Disclosed by Bank Mar 25, 2014


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Project Description

The proposed project will consist of a debt facility to PT. Bank Muamalat Indonesia, Tbk. (“Bank Muamalat” or the “Bank”) to support expansion of the Bank’s lending to small and medium enterprises (“SMEs”). Bank Muamalat, established in 1991, is the first Islamic bank and the largest private sector Islamic bank (in terms of asset size) in Indonesia. The proposed project is consistent with both IFC’s Indonesia and financial markets strategy and roles given that this project will help support sustainable rural and urban development through increase access to finance for SMEs. The proposed project is expected to help expand the products and services in Islamic financing in order to support financial inclusion and increased outreach to the base of the pyramid and to the underserved segments in Indonesia.

People Affected By This Project

(1). Promoting economic development in frontier provinces: The project will directly improve access to finance in the frontier provinces of Indonesia, where Bank Muamalat is planning to expand its portfolio to MSME segments, and thus drive economic growth, job creation, and poverty reduction in the frontier provinces.
(2). Increasing MSME access to medium and long-term finance: As Bank Muamalat grows its MSME financing portfolio, the project will allow IFC to increase access to longer term finance to the MSME segment through Bank Muamalat.
(3). Demonstration effect: A successful project with Bank Muamalat will further promote product offerings and banking services such as Islamic financing among Indonesian banks and therefore support financial inclusion to the underserved MSME.

Investment Description
  • International Finance Corporation (IFC)

The proposed project will consist of a debt facility amounting up to US$60 million on IFC’s own account to Bank Muamalat.

Private Actors

Bank Muamalat is headquartered in Jakarta and had total assets of US$4.4 billion (as of September 2013). The Bank provides Islamic banking services and products to around 3million customers through over its 450branches, which are located in major islands throughout Indonesia. The Bank also works together with National Post Services (or “PT. Pos Indonesia”) to leverage its massive network to reach rural and remote areas. Bank Muamalat operates over 1,200 ATMs to support its electronic banking business. Currently, Bank Muamalat has a total workforce of around 5,000 people. The proposed project will support the Bank’s growth strategy and increase its SME portfolio in the fast-growing Indonesia banking sector.

Contact Information

ACCOUNTABILITY MECHANISM OF IFC

The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/