Jakarta | PT Bank Pembangunan Daerah Jawa Timur Tbk (Bank Jatim)
PT Bank Pembangunan Daerah Jawa Timur Tbk (Bank Jatim) hopes to increase the proportion of loans to Micro, Small, and Medium Enterprises (MSMEs) to reduce the non-performing loan (NPL) ratio by 15 percent by the end of the year. The company sees the promising prospects of MSMEs in East Java, which makes it confident in disbursing such financing.
According to Bank Jatim President Director R. Soeroso, these prospects are reflected in the significant growth of MSME units in East Java, which increased by 61.9 percent between 2013 and 2014. Data shows that MSME units in East Java grew from 4.2 million in 2013 to 6.8 million units in the following year.
"Our vision moving forward is to focus on financing with good prospects. This means we will allocate more portions to financing that supports productive middle-class entrepreneurs. So even though it's still in the MSME segment, we are focusing on the middle segment," Soeroso explained in Jakarta, Wednesday (29/7).
Soeroso further added that the proportion of productive MSME financing will increase to 60 percent, which is higher than last year’s MSME loan proportion of 38 percent out of the total loan disbursement of IDR 26.19 trillion.
However, by the first semester of this year, the company had only disbursed IDR 4.69 trillion, or 16.58 percent of the total loan disbursement of IDR 28.29 trillion. To achieve this target, the company plans to establish a strategic business holding with the East Java People’s Credit Bank (BPR) in the second semester of this year.
"We will create a linkage with East Java BPR, where we will channel MSME loans through this BPR. Why BPR? Because their network with customers is quite strong," he added.
Reducing Non-Performing Loans
By setting this target, Soeroso also hopes to reduce the bank’s total NPL from 3.31 percent last year to 2.8 percent this year. According to Bank Jatim’s Director of Middle and Corporate Business, Su'udi, the NPL generated from MSME loans tends to be lower than other loans. In fact, NPL in the micro-financing sector has reached 0.00 percent.
"So far, commercial loans have significantly influenced our NPL, which reached 3.82 percent in the first semester of this year. Therefore, by reducing the proportion of commercial and consumer loans and increasing the proportion of MSME loans, we hope the NPL can be reduced," Su'udi told CNN Indonesia at the same event.
For your information, during the first semester of this year, Bank Jatim disbursed loans amounting to IDR 28.29 trillion, an increase of 13.97 percent compared to the previous year’s IDR 24.82 trillion. In detail, 62.85 percent was allocated for consumer loans, 21.29 percent for commercial loans, and 16.58 percent for MSME loans.
Specifically, in the MSME loan sector, which reached IDR 4.69 trillion, 15.68 percent was allocated for the Kredit Usaha Rakyat (KUR), 23.65 percent for Pundi Kencana loans, 10.28 percent for general MSME loans, and the remaining portion for other MSME loans.
Additionally, this year Bank Jatim hopes to increase loan disbursement by 20 percent from last year’s position, from IDR 26.19 trillion to IDR 31.43 trillion. (CNN Indonesia)