Creating Real Value: BRI Distributes Record IDR 347 Trillion of ESG Linked Loans


JAKARTA, Indonesia, March 10, 2021 /PRNewswire/ — Bank BRI (IDX: BBRI), Indonesia’s largest MSME bank, announces it has issued a record IDR 562 trillion in sustainable finance business under its commitment to supporting environmental, social and governance (ESG) practices in accordance with the Financial Services Authority’s POJK No 51 /POJK.03/2017 regulations.

Bank Rakyat Indonesia, Jakarta, Indonesia
Bank Rakyat Indonesia, Jakarta, Indonesia

The figure is equivalent to 63.9% of BRI’s total portfolio in 2020 and represents the sustainable business activity of 14.1 percent, a record high for the industry.

As the largest MSME bank in Indonesia, the achievement reflects BRI’s various activities to improve sustainability and ESG education to increase awareness among BRI employees and customers.

BRI’s sustainable business activities’ credit distribution rests on providing finance to social or green projects. BRI Social Financing is distributed through 504 agents in the form of MSME loans, including microloans worth IDR 488.6 trillion and super-micro-KUR distribution for homemakers and BRILink.

Under green financing projects, BRI renews its commitment to renewable energy financing and credit for pollution prevention, eco-friendly transportation, and green construction. In 2019, BRI became the first bank in Southeast Asia to issue sustainability bonds.

“Sustainable bonds have proved attractive to investors and have generated significant returns, increasing returns from US$500 million to US$3.3 billion with demand outpacing supply with oversubscribed orders of 8.4 times. In addition, BRI’s sustainability bond is also the first to be issued by a state-owned enterprise in Indonesia,” said Listiarini Dewajanti, SEVP Treasury & Global Services at BRI.

From the total US$ 500 million funds, US$ 422 million, or 84.4% of the total funds, were issued for social activities, and US$ 78 million or 15.6% were used for eco-friendly activities.

Through the distribution of BRI’s Kupedes and KUR, funding for social-related activities has created over 245,000 jobs within the MSME sector in Indonesia. With the issuance of subsidized KPRs, BRI Sustainability Bonds have also provided access to adequate housing to 1,200 people.

Sustainability bond issuance funds are also used to finance eco-friendly projects, such as Green Transportation and Green Construction, including LRT development projects.

Over the past two years, the sustainable bond market has peaked the attention of investors, projecting the ESG financing instruments to hit US$ 11 trillion in 2025. Assuming a growth trend of 15 percent per year, ESG Asset Under Management (AUM) is projected to reach more than USD 53 trillion in 2025. According to Bloomberg, from 2019 to 2020, the growth of sustainability bond issuance reached 151%, from USS 72.3 billion in 2019 to USS 109.1 billion in 2020.

“By using proceeds from BRI’s Sustainable Bond, we aim to achieve Sustainable Development Goals (SDGs), including the creation of job opportunities and inclusive economic growth, a reduction in inequality, and the provision of sustainable cities and communities,” concluded Listiarini.

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