The purpose of this study for GTZ-ProFI (Promotion
of small Financial Institutions) was to assess the current efficiency
and outreach of the People’s Credit Banks in Indonesia (Bank Perkreditan
Rakyat – BPR) and its correlation with their level of interest rates.
As a basis for the study a questionnaire was
developed requesting from the BPRs amongst other things to slice their loan
portfolio into their internal product types and providing for each of these
the outstanding loan volume, the number of loans as well as the typical
interest rate and term. To calculate a blended funding rate the
questionnaire also asked for their average funding rates on non-bank third
party savings and term deposits as well as bank loans. Beyond this the BPRs
reported on their number of loan officers and supervisors including their
respective average salaries. Estimations on the number of households in the
areas served were performed, too.
The data was requested from 60 BPRs of different
size in three provinces with different conditions regarding the financial
market and the standard of living: West Sumatera, Yogyakarta and Nusa
Tengarra Barat (NTB).
interviews took place at twelve of these BPRs.
The data together with the available
information in the reports for Bank Indonesia (BI), i.e. balance sheet and
profit and loss statement allowed
- determining indicators for efficiency,
productivity and outreach as well as some preliminary benchmarks
indicating a good performance
- comparing the BPRs amongst each other
- calculations of first rough profit margins
per loan product and the total estimated income over the last and next
Overall it was found that a few banks -
outside of NTB - do already quite well in terms of efficiency and
productivity but that that there is room for further improvement and a large
potential for outreach, i.e. expansion.
Suggestions of ways how the observed issues could be improved by the
BPRs themselves, through an improvement of the
supervisory system as well as in terms of regulations are described in the
working paper ProFI
WPS WP 02/2008.
Repair shop for motor bikes: Over
many years all the necessary machinery was financed with micro and later on
small sized loans. The well functioning business allows paying back the
loans thereby still leaving an appropriate net income.
Being a master of her small trade with bamboo: Processing the bamboo
tubes into long stripes allows producing mats that can either be rolled up
to be sold directly or further processed into walls, mattress and other