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The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has announced its commitment of a US$35mn senior loan to PT Bank NISP and plans to offer NISP a partial guarantee of up to Rp210bn related to the credit performance of a diversified portfolio of multifinance receivables. NISP is a small but important player in the Indonesian banking sector, with a large national branch network and focus on small and medium enterprise lending.
The IFC loan will help to expand NISP’s core lending activities in the small and medium business sector while also diversifying NISP’s liability structure. The partial guarantee facility would expand the capacity of NISP and enable it to acquire relatively large receivables portfolio within its risk management guidelines.
“NISP is a pioneer in supporting smaller businesses in Indonesia,” says IFC East Asia and the Pacific director Javed Hamid “Our support for NISP shows IFC’s commitment further development of smaller enterprises and the financial institutions that encourage them.”
IFC Indonesia country manager German Vegarra adds, “Our support for NISP demonstrates IFC’s commitment to expand its activities in Indonesia. The transactions highlight IFC’s creativity in serving clients through a diverse range of financial products. We hope to be able to serve more Indonesian clients through this kind of innovation.”
NISP is a commercial bank founded in 1941. Lending to small and medium businesses accounts for more than half of NISP’s lending activities. With about 150 branches located throughout Indonesia, the bank has established a regional niche to serve its small and medium business customers. The bank’s expanding branch network is also helping to form a strong base for its newer initiatives in mortgage and consumer lending.