The King of Small Things

SUNARSO’S GROWTH STRATEGY FOR THE COUNTRY’S LARGEST LENDER IS GOING DEEPER IN SMALL AND MICRO BUSINESSES. USING TECHNOLOGY TO OFFER FASTER AND CHEAPER BANKING SERVICES.

- Ardian Wibisono & Marella Putri

It’s a challenging time for the country’s banking sector. Gone are the days when the industry could book 20% loan growth annually, fueled by the commodity boom that ended in 2012. Last year, the sector only booked loan growth of 6.1%, the lowest since 2009, after a rebound of 11.8% growth in 2018. A combination of the domestic and global economic slowdown was behind the weak performance, and it is worthwhile mentioning that the rise of peer-to-peer (P2P) lending offered by tech startups has also started to carve up market share–with Rp 13 trillion in outstanding loans as of the end of 2019. Investors and business people are tending toward a continuation of wait-and-see this year. Despite easing trade tensions between China and the United States, Bank Indonesia has cut its growth forecast by 0.1% to a 5% to 5.4% range due to the coronavirus outbreak.

Since 2017, PT Bank Rakyat Indonesia (BRI) has had a blueprint to reshape its business to become more sustainable in challenging times. The blueprint target is to make BRI the most valuable bank in the region, including in terms of financial performance and governance, by 2022. The bank has a solid footprint in its core business – micro, small and medium enterprises (MSMEs) – with vast experience as well. This year, BRI will turn 125 years old, making it the oldest bank in the country. The nature of the segment, which relies on a personal relationship as well as sociological and anthropological knowledge given Indonesia’s broad cultural diversity, and BRI’s long experience, means its business is hard to disrupt.