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BRI: Advancing People’s Economy with Innovation & Technology (CNBC Indonesia)

Indonesia is a large home for micro, small and medium enterprises (MSMEs). 

Data from the National Development Planning Agency (Bappenas) and the Central Statistics Agency (BPS) say there are 59 million MSMEs in this country, equivalent to one-fifth of Indonesia's total population of 265 million. 

That's where PT Bank Rakyat Indonesia Tbk (BBRI) was born, developed, and played a big role through financial support. Until now, Bank BRI has become the largest national bank in terms of assets, as well as the most profitable bank, with the largest base of MSME customers.

As of quarter III-2018, the Bank channeled 76.9% of its loans to MSME business actors with a value of Rp. 621.8 trillion, from the total loans channeled to national businesses worth Rp. 808.9 trillion. The MSME lending was recorded at 16.5% on an annual basis (year on year/YoY). 

The potential and credit needs of MSMEs in Indonesia are still very large. According to the World Bank (World Bank) and International Finance Corporation (IFC) reports, the gap in funding needs for Micro, Small and Medium Enterprises (MSMEs) in Indonesia reaches US $ 165 billion, equivalent to 19% of gross domestic product (GDP). 

That's where BRI pledged its commitment to build the small business segment. The choice to focus on the MSME sector has made Bank BRI one of the main fighters of "people's economy" in Indonesia. 

"The people's economy is the economic activity of small people (wong cilik), which is a family activity, not a formal legal entity, not officially recognized as an economic sector that plays an important role in the national economy" (Prof. Mubyarto) 

Based on Bung Hatta's thoughts, popular economy is embodied in the explanation of article 33 of the 1945 Constitution which states that: production is not only done by all citizens, and the results are distributed to all members of the community fairly and equally. 

Main Machine for KUR Distribution 

One of the banks active in KUR distribution is BRI in order to improve the people's economy in Indonesia. Throughout 2018, BRI Bank managed to channel KUR with a total of Rp. 80.2 trillion to 3.9 million MSME players throughout Indonesia. 

Director of Micro and Small Bank BRI Priyastomo added, the achievement made Bank BRI the largest KUR distributor in Indonesia with a portfolio of 64.9% of the total national KUR 2018 distribution target of Rp 123.56 trillion. 

"In total, from 2015 to 2018 BRI has successfully channeled KUR worth IDR 235.4 trillion to 12.6 million MSME players. This is a concrete step for Bank BRI to encourage people's economy in Indonesia by directly touching grassroots," he said. 

The success of Bank BRI as the biggest KUR distributor in Indonesia is inseparable from the role of BRI KUR marketers. At present, BRI has 13.121 marketers who focus on channeling KUR. 

"In addition, the digitalization of business processes has proven to be able to accelerate SLA KUR credit submissions at BRI. Through the BRISPOT application, it is able to accelerate the KUR submission process so as to increase the productivity of marketers," concluded Priyastomo. 

KUR distribution remains the mainstay of the government to encourage people's economy. In 2019, the KUR distribution target was increased to Rp 140 trillion compared to 2018 Rp 123 trillion. The government also stipulates that KUR interest has not changed, namely 7%. 

The government's consideration in setting the KUR target is 2018 economic growth which is estimated to reach 5.2%. 

Encourage Financial Literacy & Technology Applications 

Being a bank of "small people" does not mean sticking to the "traditional" character that is the stereotype of MSME actors, BRI is actually able to describe modern banking financial services.

Although it focuses on MSMEs where its customers are mostly "small" entrepreneurs in remote areas of the archipelago, BRI is in the forefront of technology-based services. 

The world has witnessed how the bank that was established in Purwokerto in 1895 became the only bank in the world to own and operate satellites, after the successful launch on June 18, 2016.

To read the rest of the article, please use this link: https://www.cnbcindonesia.com/market/20190121155330-17-51632/bri-memajukan-ekonomi-kerakyatan-dengan-inovasi-teknologi


By CNBC Indonesia | January 24th, 2019

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