
Indonesia's finance sector to get $300M boost from ADB
Indonesia’s financial sector will get a $300 million loan from the Asian Development Bank to improve the operations of the local regulator, deepen capital markets and expand non-bank financing.
According to the Manila-based lender, the loan will be offered to the government’s Financial Market Development and Integration Program, which will include supporting the integration of the Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) into the integrated Financial Services Supervisory Authority (OJK).
ADB documents say the FMDI program involved efforts to improve transparency at Bapepam-LK through the adoption of international accounting and financial reporting standards. Bapepam-LK also intends to use the funding to launch a Securities Investor Protection Fund to shield capital market investors and allow them to self-monitor investment portfolios.
The FMDI program aims to promote a greater participation in retirement planning and grow Islamic-compliant insurance products.
“This program targets an increase in non-bank finance sub-sector assets to 65 percent of gross domestic product by 2014 from 60 percent in 2010 and aims to increase the level of domestic ownership of tradable government securities to 73 percent by 2012 from 70 percent in 2010,” the ADB said.