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The Ton Punong Live

The Ton Punong Live. Veteran broadcaster Ton Punong takes viewers to a deeper discussion of the hottest issue of every week. He digs into no-nonsense banter because he believes that the microfinance issues and concerns cannot be addressed just by an outburst of words and emotion.

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The Ton Punong Live

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  1. The Ton Punong Live Veteran broadcaster Ton Punong takes viewers to a deeper discussion of the hottest issue of every week. He digs into no-nonsense banter because he believes that the microfinance issues and concerns cannot be addressed just by an outburst of words and emotion.

  2. This week’s theme: “Microfinance: Trip Ko To! “A 30-minute conversation with RBAP-MABS Practitioners who joined the Indonesia Study Group in December 2004 and April 2005” The Ton Punong Live

  3. Tonight’s Guest: • Gen. William Hotchkiss (Ret) • Ms. Vivian Lim • Mr. Gerald Guillen The Ton Punong Live

  4. The Study Trip • International Seminar on Microfinance, December 1-3, 2004, Bali, Indonesia • Exposure Trip to Bank Rakyat Indonesia (BRI) The Ton Punong Live

  5. Seminar Objectives • To review key strategic decisions that had been crucial to BRI’s transformation and achievements; • To deliberate upon key issues and challenges and discuss the prospect and innovation in microfinance industry; • To explore opportunities for future partnerships and learning, as well as in international forum of experts, policy makers, practitioners and investors to share experiences and perspective of microfinance; • To support global campaign on building inclusive financial sector to achieve the millennium development goals. The Ton Punong Live

  6. Seminar Speakers Marguerite Robinson: • How the Unit Desas transformed BRI from failure due to Subsidized (Government) Credit Program to a Global Commercial Microbanking Model • The Double Bottom Line : “Doing Good by Doing Well” Michael Chu: • Future Directions of the Microfinance Industry • Leading MFIs will complete link to funding sources • Conventional banking will enter into microfinance • Continued dominance of today’s MFI leaders will depend on the development of new capabilities • Key new markets will open to microfinance The Ton Punong Live

  7. BRI History of BRI • Originally called Priyayi Bank of Purwokerto, created in 1895 by Rade Wiriamaadya, a Javanese government official intended for Indonesian elite • In 1897 reorganized as cooperative bank by the Dutch government • In 1946, change name to Bank Rakyat Indonesia • In 1950, became state-owned commercial bank • In 1970s, BRI created 3600 village banks called Unit Desas • In 1984, Unit Desas were re-structured • In 1992, became a limited liability corporation • In 2003, a public company The Ton Punong Live

  8. BRI - What makes BRI work: • Clear Mission, Vision and Objectives • Very Efficient operations – The Unit Desa Structure • Simple Product Design • Emphasis on Deposit Mobilizations to fund lending activities • Strong Internal Control Procedures

  9. BRI Organizational Structure HEAD OFFICE IN JAKARTA 15 REGIONAL OFFICES 320 BRANCHES (District Level) 4,057 BRI Unit Desas (Sub-District Level)

  10. BRI Unit Desa • Typically occupies one-room office, usually rented • Covers an average of 16-18 villages; 4500 savers, 700 borrowers • Four staff with clear job descriptions and division of responsibilities

  11. BRI Unit Desa Structure • Unit Manager – manages all activities • Credit Officer (Mantri) – do field CI/BI & follow up delinquent borrowers • Teller – serves customer at the counter • Desk Officer – maintains records & files, prepares FS

  12. BRI Internal Control • Supervision: • The Unit Manager • The Assistant Micro Business Manager • The Branch Manager • The Regional Office • Head Office • Inspection: • The “PENILIK” or unit internal controller • Special Team Inspection • Internal Audit

  13. BRI Internal Control • Types of Supervision • Passive – receive regular reports e.g. daily, …annual • Active – regular visit • Each levels of supervision, except for the Unit Desa head, must have visited the unit once 1 year e.g. the branch head, regional head, and Head Office Internal Audit • Regular monthly visits by PENILIK • The PENILIK, under the BM, covers 4 units • Branch with 2 to 4 units = 1 Penilik • Branch with 5 to 8 units = 2 Penilik • Branch with 9 to 12 units = 3 Penilik • A new Penilik must be recruited for every 4 units

  14. BRI Products • Savings Products: • Simpedes (Village Savings) – simple savings deposit facility; favored by low income households; no fees to open an account; comprise more than 75% of BRI’s Microbanking savings accounts • SIMASKOT – an equivalent savings facility that caters to urban areas; emphasizes on security • TABANAS BRI – a government savings program; limited to only two (2) transactions per month • Other Deposit Products: • Giro – checking account; if the client needs very liquid and does not mind interest rate • Time Deposit – if the client needs high savings interest rate

  15. BRI Loan Product KUPEDES • A credit facility provided only by BRI Unit (not BRI Branch) to develop and improve eligible small business • Loan Amount • Minimum = Rp 25,000 ($3 or PhP 168.00) • Maximum = Rp 50 Million ($5,000 or PhP 280,000) • Loan Term • Minimum = 1 month • Maximum = 24 months (working capital) • 36 months (investment loans) • Monthly, quarterly or bi-annual repayment schedule • Repayment Rate = 98.34%

  16. BRI Facts & Figures • 13 Regional Offices • 320 Branches • 4,057 Unit Desas

  17. BRI Facts & Figures Outreach

  18. BRI Facts & Figures Asset Quality Financial Performance 1 Microbanking unit PAR 2.8%%

  19. BRI Facts & Figures Efficiency & Productivity

  20. BRI Savings Mobilization Background How they arrived to their savings mobilization systematic approach(SMSA) • The habit of the people – where they save their money • The reason why people like to save in the bank • Source of deposits • Know the competitors

  21. BRI Savings Mobilization The Approach • Identify potential savers • Define the potential savers • Prepare the workplan • Marketing • Monitoring

  22. BRI Savings Mobilization The Strategy • Effort were focused to the BRI units with savings less than Rp 500M or PhP 3.2M or $60,000 • Concentrated the marketing to the regular savings rather than time deposit and other high cost deposit products • Savings mobilization must be done consistently • Give incentives to savers • Regular lotteries e.g. monthly, quarterly, semi-annual • Savers prefer prizes in kind rather than cash and prefer to receive the prizes during parties and gatherings sponsored by the units or group of Unit Desas

  23. OPEN FORUM

  24. Closing • What makes an MFI work: • Clear Mission, Vision and Objectives • Very Efficient operations – The Unit Desa Structure • Strong Internal Control Procedures • Simple Product Design • Emphasis on Deposit Mobilizations to fund lending activities

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