Aceh, January 25, 2006 - Allianz has launched three microfinance projects worth 330,000 Euro to assist in rebuilding microfinance institutions in Aceh. All three projects are being implemented together with German Technical Cooperation (GTZ), a German governmental organization with more than 10 years of experience in developing the microfinance sector in Indonesia.
“A mere 100 Dollars are enough to start a small business in tsunami-stricken Aceh. Such small businesses are very capable of providing an entire household with a constant and sustainable income”, explained Jens Reisch, CEO of Allianz Life Indonesia.
However, today, one year after the Tsunami, the people in Aceh face great difficulties in obtaining credit even for only 100 dollars. Many of the small financial institutions that provided credit to micro-entrepreneurs were virtually swept away by the waters.
Self-Help Groups for Women
The first of three microfinance projects focuses on revitalizing a network of women’s self-help groups (Kelompok Simpan Pinjam – KPS) in Banda Aceh and East Aceh. Before the Tsunami, these groups engaged in collecting regular savings from their (up to) 40 exclusively female members. The collected funds were then distributed as credits at interest to members who wanted to start or expand their business – traditionally activities such as embroidery, weaving or production of herbal medicines.
Allianz provides 20 of these Self-Help Groups with compensation of their assets lost in the Tsunami. This will enable the groups to disburse credits of up to 100 Euro again. Furthermore, GTZ provides marketing and management training for the groups.
Saving and Credit Cooperatives
In a second project, Allianz and GTZ are currently establishing two savings and credit cooperatives from scratch in the region of East Aceh. Such cooperatives provide similar services as the Women’s Self-Help Groups but at a larger scale, more formalized and strictly based on Islamic finance principles. The Tsunami left only 10 out of formerly 21 of these cooperatives functioning. However, potential for more than 500 savings and credit cooperatives has been identified by GTZ.
The two cooperatives set up by Allianz and GTZ receive technical assistance during the establishment process along with initial apitalization. The funds entrusted to the cooperatives will serve to kick-start a revolving loan process that ensures the long- term sustainability of these institutions. This project is a model project that will be duplicated in other regions of Aceh.
Commercial Rural Banks
The most formal institutions to benefit from the Allianz microfinance projects are 5 small commercial rural banks (Bank Perkreditan Rakyat - BPR) in the area of Banda Aceh. These 5 banks lost capital, staff and customers to the Tsunami leaving them depleted of liquidity, equity and know-how. Similar to the Women’s Self-Help Groups and Cooperatives, Allianz and GTZ is assisting these institutions with recapitalization funds and extensive best-practice management training according to international and national standards.
With an average recapitalization of 25.000 Euro, these banks, 3 of which follow Islamic finance principles, will be able to serve up to 100 micro-enterprises each. This may seem small compared to the big commercial banks, which generally don’t serve the self-employed and micro-business sector. However, for the greater part of the Acehnese people, who for the most part are self-employed in the informal sector, such assistance makes a big difference.
In order to optimize the benefit for the local economy and livelihood generation, 65% of the BPR funds have to be disbursed to the production and agricultural sectors. Only 35% are earmarked for trading businesses.
All Allianz microfinance projects follow the principles of sustainability and local empowerment. “We are basically helping people to help themselves. By promoting their daily activities and income generation, we hope to assist the people of Aceh in getting back to normal again.” summarized Jens Reisch, CEO of Allianz Life Indonesia.
With a total of over 2,000 supported households and timeframes of up to 8 years, the Allianz microfinance projects demonstrate Allianz’s commitment to dedicated and long-term assistance for the Tsunami affected areas. This reflects Allianz’s strong attachment to Indonesia and the South-East Asian region as a whole.
The 3 microfinance projects launched this January in Aceh are financed by Allianz’s corporate donations and are planned to be expanded further in the future. Allianz’s worldwide corporate donations amount of to 1.6 million Euro. For a large part, these corporate donations will benefit microfinance and livelihood projects in the entire Tsunami area.
In addition to Allianz corporate donations, Allianz’s employees world wide donated 1.4 million Euro for Tsunami emergency aid. These funds were mostly used to support education and health projects.
For further details :
Agung Priambadha
Public Relations & Communications
Tel.: +62 21 52998848
Fax: +62 21 5253246
Email: Agung.Priambadha
@allianz.co.id
About Allianz
The Allianz Group is a leading global provider of insurance and financial services with operations in more than 70 countries, and employing over 173,000 staff. The Group serves more than 60 million customers worldwide, including close to half of all Fortune 500 companies.
Through its insurance business, Allianz employs more than 20,000 staff in 14 countries across the Asia Pacific region. In 2004, the Group recorded total revenues of Euros 1.672 billion from its property and casualty insurance operations, and Euros 2.551 billion from its life and health insurance operations in the Asia Pacific region*.
PT Asuransi Allianz Life Indonesia was established in 1996, and offers life and health insurance solutions, unit link products and the pension plans (DPLK) for individuals as well as the corporate. Today, PT Asuransi Allianz Life Indonesia operates a wide network of more than 60 agency offices throughout Indonesia in more than 42 locations, supported by 6000 financial consultants dedicated to serving some 280,000 policyholders. PT Asuransi Allianz Life has already grown substantially over the past twelve months, having increased its premium income in 2005 by 40% when compared to the same period last year.
Since its establishment in 1989, Allianz Utama Indonesia has grown into one of the largest non-life insurers in Indonesia and now operates a distribution network of 7 branch offices and 17 Point of Sales in Jakarta and other important cities nationwide. For its outstanding performance, Allianz Utama Indonesia was honored Excellent / Very Good grade from Infobank Insurance rating 2002 & 2003, The Best General Insurance Company from Bisnis Indonesia Award 2003 and also Best General Insurance Company from Investor Magazine Insurance Rating 2004.
*Total revenues comprise property-casualty segment’s gross written premiums, life and health segment’s statutory premiums.