IFC provides $15m in investment for Buana

The Jakarta Post, Jakarta

The International Finance Corporation (IFC), the private arm of the World Bank, has approved US$15 million worth of investment in PT Bank Buana to help it strengthen its lending activities to small and medium-sized enterprises.

"This investment will benefit small and medium businesses, which account for some 40 percent of Indonesia's gross domestic product (GDP) and employ about 50 percent of the country's workforce," Karl Voltaire, Director of IFC's Global Financial Market Department, said in a statement.

Bank Buana has long been regarded as one of the country's most efficient commercial banks, with particular strength in serving smaller business.

During the financial crisis in the late 1990s, Bank Buana was one of only a handful of banks that managed to survive without a government bail-out scheme.

Buana's president Jimmy Laihad said that to further develop its business, the bank planned also to utilize IFC's know-how in adopting international best practices in credit evaluation, risk management, information technology and organization.

Only by implementing and improving the good corporate governance principles, Indonesia can revive confidence from international investors to invest in the country, Jimmy added.

Karl echoed Jimmy's remarks, saying: "We hope the investment will help reinvigorate interest in Indonesia by foreign investors, who have scaled back their operations or pulled out since the financial crisis."

As of last year, Buana's total assets stood at Rp 13.4 trillion (about $1.5 billion) with a net income of Rp 251 billion.