Microfinance Horizon

7 December 2010 [Tempointeractive]

More than 23,000 women running micro-businesses in Central Java received non-collateral loans this year, Bank Sahabat CEO Franky Suhenda said in Semarang yesterday.

The Semarang-based general bank focuses on providing loans to micro-businesses with a specific emphasis on loans to women starting small businesses such as street vendors. “Micro loans can be extended to groups of 12 people,” explained Franky.

Next year, the bank will offer micro-finance loans to 35,000 businesswomen in Central Java. The banks currently offer such loans in Semarang, Ungaran, Pekalogan and Tegal. “Our market is still very open,” Franky said, adding that other banks were yet to offer micro-finance loans to small-scale businesswomen.
M. Maulana, Bank Sahabat’s cluster manager, said the total credit disbursed this year amounted to Rp75 billion. Each debtor received a loan ranging from Rp505,000 to Rp2.5 million, with an interest rate of 2.5% within a 25-week loan period.

While the credit is extended to small-scale businesspeople, Maulana said he was not concerned about non-performing loans as they only amounted to 1% of Bank Sahabat’s total loans.

Micro-finance loans are paid on a weekly rather than monthly basis and loan recipients must prove their business has been running for more than six months, added Maulana. “We also send out staff to supervise the debtors,” he said.