KB Kookmin Card's Indonesian Local Subsidiary Raises 50 Million USD in Local Currency Funding from IFC

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Eliminating Currency Risk Possibility through Local Currency Borrowing in Indonesia

[Asia Economy Reporter Ki Ha-young] KB Kookmin Card's local subsidiary in Indonesia, ‘KB Financialia Multi Finance,’ announced on the 21st that it has successfully secured funding from the International Finance Corporation (IFC), becoming the first domestic specialized credit finance company’s overseas subsidiary to do so.

IFC is an institution under the World Bank with offices in over 100 countries worldwide. As of 2020, it has invested USD 22 billion in private companies and financial institutions in developing countries, making it the largest emerging market private sector investment development finance institution engaged in activities aimed at poverty eradication and shared prosperity.

The funds contracted by the Indonesian local subsidiary this time amount to USD 50 million (approximately KRW 54.6 billion) borrowed in Indonesian local currency (Rupiah), with KB Kookmin Card headquarters providing a payment guarantee.

Notably, this funding was borrowed in Indonesian local currency, eliminating the potential foreign exchange risk compared to borrowing domestically and then remitting funds. The borrowing period is three years.

KB Kookmin Card expects that this funding from IFC will enable diversification of the Indonesian local subsidiary’s funding portfolio as well as improvement in funding costs.

Furthermore, IFC’s financial support to financial companies operating in developing countries externally recognizes the stability of these companies, enhancing the credibility of KB Kookmin Card and its Indonesian local subsidiary, and is expected to have effects such as upgrading the company’s credit rating and facilitating local funding in the future.

Following this funding, KB Kookmin Card plans to cooperate with IFC to explore new financial business opportunities, such as introducing ‘supply chain finance’ products targeting Korean companies operating in Indonesia and local companies facing difficulties in funding.

In addition, KB Kookmin Card will continue efforts and activities for mutual joint development through various collaboration programs with IFC in Southeast Asian regions where it has entered, including Indonesia, Cambodia, Laos, and other markets under consideration for future entry.

A KB Kookmin Card official explained, “This funding is part of efforts to improve the funding structure of overseas subsidiaries. After discussions began between KB Financial Group Chairman Yoon Jong-kyu and senior IFC officials at the World Bank Group-International Monetary Fund (IMF) Annual Meeting in October last year, over the course of about a year, through active consultations and due diligence for funding, this first achievement of securing approximately USD 50 million has been realized.”

This content was produced with the assistance of AI translation services.