Bank Mandiri, Indonesia’s largest lender, plans to establish a venture capital subsidiary, in a move to bypass a Financial Services Authority, or OJK, rule that bars Mandiri from owning businesses other than financial services.
Ogi Prastomiyono, Mandiri’s managing director for risk management and compliance, says the lender has submitted the proposal to Financial Services Authority and expects to get the permit by the end of this year. Having a venture capital firm “allows Bank Mandiri to access business outside financial services,” Ogi said.
The lender has yet to decide whether to acquire an existing venture capital firm or forming a new one. Muliaman Hadad, the chief commissioner of OJK, said that the authority is mulling a new venture capital regulation that, among other matters, will require the venture capitalist to invest 70 percent of their money in start-ups, which do not have any track-record and any access to conventional lending.
While he has yet to respond to Mandiri’s plan directly, Muliaman had at times encouraged the state-controlled bank to help with venture capital development.
Source: Jakarta Globe, 17 February 2015