Local press has reported that HSBC Amanah's Indonesian unit, Amanah Syariah has allocated $2.12m to the development of micro, small- and medium-sized enterprises in Indonesia.
The program will be overseen by Permodalan Nasional Madani, a government- owned finance house, through a Mudarabah agreement. HSBC is also funneling its investment through PNM. PNM currently operates 378 branches throughout Indonesia, seven of which provide Shari'ah compliant microfinance services in the provinces of Banda Aceh, Padang in West Sumatra, Semarang in Central Java, Surabaya in East Java and Makassar in South Sulawesi.
Lintang Nugroho, director of finance and operations for PNM told The Jakarta Post that PNM would channel the HSBC investment to SMEs through its Shari'ah based microfinance service branches. HSBC was the first foreign bank to establish an Islamic finance presence in Indonesia after it embraced the sector in 2007.
The world's most populous Muslim country was a relative latecomer to the Islamic finance party, only opening its markets up 25 years after neighbor Malaysia. Today Indonesia has 11 fully Islamic banks and a further 23 institutions with Shari'ah windows
© The Islamic Globe 2011
