Indonesia state-owned bank PT Bank Mandiri Tbk (BMRI) has set up its venture capital firm, Mandiri Capital with an initial capital of Rp 500 billion ($36.90 million). Mandiri Capital, which is set to launch operations next year, will prioritise investing in startups that provide innovative payment services relevant to e-commerce.
Bank Mandiri CEO Budi Gunadi Sadikin told reporters, the company was in the process of selecting candidates to head its new venture capital, Mandiri Capital, after it successfully secured a permit from the Financial Services Authority (OJK).
“There is an enormous chance in the country because we are seeing local startups growing, especially in the e-cash business,” he said.
On its part, the financial services regulator too is planning to come out with venture capital guidelines that would require firms to invest 70 per cent of their capital in startups as this segment has inadequate access to conventional lending.
The regulation is expected to come into effect by the year-end. The move is in line with a rule OJK implemented last year proposing that all domestic banks should facilitate startups outside the financial sector.
Besides Bank Mandiri, PT Telekomunikasi Indonesia Tbk (TLKM), the country’s largest telco, in 2014 allocated $75 million to its venture capital unit, PT Multimedia Nusantara or TelkomMetra. Also last year, PT Indosat Tbk (ISAT), another cellular operator, put $20 million into its own venture capital fund.
Rudiantara, minister of communication and informatics, in February, said the government expects the private sector to set aside $1 billion for tech startup investment during the next five years.