Helping The Poor as a Profitable Business: The Story of BRI-Units

For most companies, a “helping the poor” program falls into their corporate social responsibility program. Such programs are considered a routine for most companies. Unfortunately even though such programs are routinely held, it is still viewed as charity. As a result the number of poor that can be helped by such programs is restricted.

Looking at the large number of poor, a rapidly growing majority of the world’s population, it is obvious that an innovative solution to help those who are poor is needed. BRI, an Indonesian state-owned bank has succeeded in developing an innovative program to help the poor and low-income people. Whereas BRI Unit, a functional unit located in rural and suburban areas used to help improve the welfare of low-income and poor people, has grown into a profitable business unit. Now, BRI-Units has become the world’s largest micro finance institution, helping tens of millions of low-income and poor people.

The success of BRI Unit Desa was keenly felt when the worst economic crisis in modern Indonesia’s history occurred in 1998. Besides adding significantly to the number of poor, the crisis- which also affecting other Asian countries- also threatened the existence of most local Indonesian and Asian banks. The result is a bevy of predictions – among others from McKinsey&Co – that global banks will dominate Post-Crisis banking and finance in Asian countries.

This prediction also applies to the micro finance sector, especially since more and more global banks have entered the business of micro finance. However due to its position as a benchmark in the world of micro finance, BRI not only successfully held on to it’s position but achieved a strengthened its position for the future....

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