FMO considers $20m debt facility for Indonesian microfinance firm

Photo by Wahyu Setiawan on Unsplash.

Dutch development bank FMO is mulling a proposal to extend an unsecured senior loan of up to $20 million to Indonesian non-banking financing company Mitra Bisnis Keluarga Ventura (MBK), per a disclosure.

The loan facility will have a tenor of five years, FMO said.

“The funds will be utilised to finance the growth of the microfinance portfolio in rural areas,” it added.

Founded in 2003, MBK provides microfinance loans and working capital to low-income households in Indonesia. It is modelled after Bangladesh’s Grameen Bank that provides credit to the poor in rural areas without any collateral.

All of MBK’s more than 1.3 million clients and its field staff are women. The NBFC has to date disbursed loans worth over $260 million.

FMO said an amount of $15 million from its loan will be used to provide very small working capital, averaging $200 per client, to the bottom 25 per cent of the population in Indonesia by income.

The working capital, which will be offered to women only, is aimed at stimulating the development of small business.

The remaining $5 million will be allocated to Water, Sanitation and Hygiene (WASH) loans to contribute to the supply, storage and access to clean water, the collection, storage and transportation of human waste and hygiene practices to poor households in Indonesia.

MBK is a 99.7 per cent owned subsidiary of PT Bina Usaha Keluarga, which is in turned 20 per cent owned by the International Finance Corporation (IFC).

IFC made a $3 million equity investment in the firm in 2013, then committed $50 million in debt financing in 2017.

MBK was the first microfinance institution in Indonesia to be financed by FMO in 2012, the development bank said. It provided a $13.5 million loan to the firm in 2014, followed by a $15 million facility in 2017.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.