IBM, PT Permodalan Nasional Madani and PERBARINDO Collaborate to Enhance Microfinance Capabilities of Rural Credit Banks in Indonesia

JAKARTA, INDONESIA - 14 Feb 2008: IBM (NYSE: IBM), PT Permodalan Nasional Madani (PNM), a unit of the Ministry of Finance, and PERBARINDO, an Indonesian rural banks association, today announced their intent to collaborate on the delivery of a microfinance solution platform aimed at improving the efficiency and reach of rural credit banks in Indonesia to drive innovation and growth.

The development of rural credit banks will be critical to the government's increased focused on fueling the growth of small and medium-sized businesses in Indonesia, which contribute 75 percent to the overall economy. Additionally, with the government's focus on poverty alleviation and empowerment within rural communities, the role of micro enterprise is also seen as crucial for growth to the economy. PNM strongly believes that facilitating access to banking services across rural communities will spark broad economic development in Indonesia.

The strategic collaboration will explore solutions for a shared financial services infrastructure for rural credit banks and institutions totaling more than 1,650 members (as of January 2008) to broaden access to basic financial services across rural communities. The microfinance solution designed by IBM can provide rural credit banks with a scalable technology platform comprising of a core banking processing engine coupled with customer-facing banking services distribution capabilities that requires minimal up-front investment. This solution will enable rural credit banks to derive immediate benefits associated with scalable, cost-effective, robust and flexible solution meeting a variety of business needs.

Dino Bramanto, Country Manager, Finance Service Sector, IBM Indonesia, said, "We will leverage IBM's global best practices and experience in microfinance to aid the transformation of rural banks in Indonesia. IBM is committed to deliver integrated and innovative core banking solutions taking advantage of superior technology and customised banking solutions through this collaboration. With enhanced customer-centric solutions, IBM can deliver greater economies of scale and support critical business functionalities for the rural banks to operate optimally. The solution will help the banks improve customer service which in turn will make it easier for the SMBs to do business with the banks. This will allow the SMBs to focus on the growth of their businesses."

According to Widyaka Nusapati, Director, PNM, "Together with IBM we will bring deep experience in banking transformation through innovative technologies to enable rural credit banks to achieve improved service delivery, enhanced productivity and streamlined banking processes at dramatically lower costs. Today's announcement marks the first step in achieving this important fundamental transformation of the rural banking sector of Indonesia."

Perbarindo as the main association of rural credit banks is committed to delivering innovative and efficient services to the public. Hartono, Chief of DPP PERBARINDO, indicated that rural banks need simpler, more powerful technology solutions that will help them compete successfully in today's environment. "This collaboration will provide world class technologies and services to rural banks in Indonesia who are emerging in the Indonesian marketplace," he said.

About IBM

For more information on IBM, visit www.ibm.com

About PT PNM

PNM is a wholly Government-owned Corporation founded in Jakarta. PNM's principal tasks are to provide financing solutions to MSMEs and co-operatives using existing capacity according to business feasibility and market economics. Through the development of alternative financing models, PNM's financing schemes will seek to minimise collateral approaches and profiteering. PNM will also provide management assistance packages as an integral part of capital finance. These policies will be put into operation through a range of financial institutions: venture capital firms, syariah banks, savings and loans co-operatives and rural banks. Some will be established for this specific purpose, while PNM will also utilise existing financial institutions with their nation-wide coverage.

Areas of immediate priority for business development include food crop agribusiness, estates, fisheries, livestock farming, forestry and export-oriented, labour-intensive cottage industries generating added value, in addition to service industries such as developers, tourism and human resources. This added value is defined as a combination of commercial feasibility, technology utilization and product quality.

About PERBARINDO

Following the growth of Rural Credit Banks in Indonesia, PERBARINDO was established in 1993. It has 18 regional representative offices in Indonesia with more than 1,650 members. PERBARINDO is an association of Rural Credit Banks throughout Indonesia that operates independently.

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