Major banks expand to venture capital business

January 31, 2017, 01.13 PM  | Reporter: Galvan Yudistira
Major banks expand to venture capital business


JAKARTA. The startups booming, as well as the slow credit allocations have driven some major banks to expand to startup financing business through capital venture.

Recently, Bank Central Asia (BCA) established a venture company, namely PT Central Capital Venture (CCV) with a total paid capital as much as Rp 200 billion.
Previously, at the early 2016, Bank Mandiri has established a venture company, namely Mandiri Capital Indonesia (MCI).

President Director of BCA Jahja Setiaatmadja said that BCA will closely supervise the venture capital business of the bank. “The additional capital if possible if (the business) is positive,” Jahja said.

CCV will invest in and collaborate with some financial technology (fintech) companies. This venture company will also support the ecosystem of financial services of other BCA’s subsidiaries.

Meanwhile, Bank Mandiri will inject additional capitals to boost the performance of Mandiri Capital. Financial and Treasury Director of Bank Mandiri Pahala Nugraha Mansury said MCI will receive additional capitals as much as Rp 200 billion.

President Director of Mandiri Capital Indonesia Eddi Danusaputro added that the additional capitals would be allocated as equity capitals in some fintech startup companies.

Last year, Mandiri Capital had invested as much as Rp 210 billion in some fintech startup companies. Those companies are more focusing on payment and lending services.

Aside of those two banks, Bank Rakyat Indonesia (BRI) and Bank Negara Indonesia (BNI) will also expand to venture capital business. “To date, BRI is considering establishing a venture capital company,” said Corporate Secretary of BRI Hari Siaga.

Director of Planning and Operations of BNI Bob T. Ananta said that BNI will establish the venture capital company this year. This business plan aims at anticipating the existence of fintech companies.

Venture capital has large business opportunities and potentials to grow. Chairman of Indonesian Startups and Venture Capital Association Jefri R Sirait, the business is potentially to grow by two-digit in this year, following the growing fintech startup companies and the segment of small and medium enterprise.

However, the banks also need to anticipate the risks, on the grounds that the startup business requires a large amount of capital and is not necessarily profitable. (Muhammad Farid/Translator)

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