NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Monday, February 3, 2014

The absence of cash machines on many of Indonesia’s Spice Islands, where cloves and nutmeg once made sultans and European explorers wealthy, means banking is often done on boats that can carry automated teller machines.

PT Bank Rakyat Indonesia (BBRI), the world’s largest microlender, is expanding to the edges of the archipelago’s 17,000 islands with over 500 new branches to develop local economies, President Director Sofyan Basir said in an interview. Bankers only reach some islands once a week in boats, he said.

The country’s most profitable bank is tapping island markets as it sees potential microlending growth of 20 percent this year, while corporate loan expansion may slow to 10 percent to 15 percent after interest raterises, Basir said. That means more bankers roughing it out in places with no infrastructure and without much sanitation.