Bank Muamalat’s reoriented strategy concentrates on high growth areas of the Indonesian economy while complementing overarching government programs to support Indonesia’s sustainable and inclusive economic development. Small, Medium and Micro enterprises provide the country’s economic anchor as the main source of employment making them central to Indonesia’s future in addition to representing highly lucrative financing opportunities. Bank Muamalat recognises the importance of supporting Indonesia’s SMEs and micro businesses as well as the need to create customised products to suit their particular financing needs for now as well as for their future business expansion.
Bank Muamalat has taken significant steps to secure strategic partnerships for effective distribution of its shariah financing products to fledgling companies through business organisations such as KADIN’s Division of Fisheries and Maritime Affairs. Lending to this segment rose by 59% in 2012 to 6,476 billion RP mainly for working capital, investments and shariah mortgage financing. The Muamalat Cash Management System has also seen a rise in corporate transactions undertaken by SMEs to a value of 575 billion RP demonstrating the more streamlined and efficient business practices being undertaken by clients.
In order to offer tailored derivative products, Bank Muamalat has also joined forces with leading equipment suppliers in key sectors such as medical equipment and palm oil in order to provide SME clients with optimal shariah financing rates. To further develop this integrated strategy for SMEs, the bank will also introduce a Supply Chain Financing Program for SMEs by tapping into its network of large scale corporations and broad industry knowledge for effective financing solutions.
In preparation for its accelerated expansion of SME and micro lending, Bank Muamalat overhauled its risk management system and implemented an improved scoring system for assessing financing applicants. The bank also introduced various tools for managing operational and market concentration risk to combat overexposure in a given market segment in addition to launching the Muamalat Early Warning System to detect adverse risks in the business performance of debtors.
