REPUBLIKA.CO.ID, JAKARTA -- International Finance Corporation (IFC), the World Bank's private investment arm, has agreed to sign a US$75 million investment agreement with publicly listed PT Bank Danamon Indonesia to finance loans for small and medium enterprises (SMEs).

"Loans for the SME sector play a significant role in alleviating poverty," IFC country manager for Indonesia, Sarvesh Suri said in a press conference here on Tuesday.

Sarvesh said Danamon had a significant reach of the SME sector and the IFC investment would support the development of Indonesian SMEs to an even greater extent.

The investment was also in line with IFC's strategy in Indonesia to strengthen the country's financial institutions to better serve SMEs and create more jobs in institutions which had strong vision, he said.

Indonesia now had almost 55 million SMEs but only 30 percent of them had access to financial services, he said.

Danamon President Director Henry Ho said the IFC investment would help boost the bank's growth by improving its SME-based financial and banking services.

"I am convinced that the long-term partnership proves that Danamon and IFC have the same goal to boost the growth of the Indonesian economy," he said.

Noting that Indonesia had 55 million SMEs capable of creating 15 million jobs, he said the partnership would be able to improve the living standard of the Indonesian people.

Earlier, in 2006, IFC also extended US$150 million to Danamon to finance loans to SMEs.

"We are very proud of this strategic partnership with IFC. We believe that the Indonesian SMEs will benefit from increased access to financial services," said the bank's treasury and capital market, financial institutions and banking transaction director, Pradip Chhadva.

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