Facilitating the Expansion of Community Credit Banks

Bank Indonesia (BI) policy relating to Community Credit Banks (BPR / BBank Perkreditan Rakyat) is one of expansion of existing banks rather than simply permitting new start-up ventures. A survey of BPR by BI indicated that of 1,926 BPR throughout Indonesia 1,503 were in either Java or Bali. The survey also indicated that there were only 104 BPR providing Syariah financial services in this sector. Therefore, the purpose of this BI Regulation,No. 8/26/PBI/2006is to encourage the opening of greater numbers of branch offices for existing BPR and strengthening the economic role of the BPR sector.