Southeast Asia's Credit Revolution by Aditya Goenka David Henley

Author:Aditya Goenka, David Henley [Aditya Goenka, David Henley]
Language: eng
Format: epub
ISBN: 9780415809979
Barnesnoble:
Publisher: Taylor & Francis
Published: 2011-09-15T00:00:00+00:00

Funding and investment structure

The funding and investment structures of the BKD more closely resemble those of part-time village moneylenders than those of most financial institutions. Ninety-four per cent of assets originate from equity and mandatory savings. The low investment rate is also remarkable: only 56 per cent of BKD assets, at the end of the twentieth century, were invested in loans, while 37 per cent of assets were deposited with Bank Rakyat Indonesia Table 6.3.

Two aspects are noteworthy in the funding structure of the BPR systems. First, all generate more than half of their assets through deposits. While the deposits of private BPR unit banks consist mainly of time deposits, those of the public LDKP consist mainly of savings. The average size of time deposits at the BPR unit banks is nearly four times that at the LDKP. One reason for the lower share of time deposits at the LDKP is that they offer lower interest rates than the BPR unit banks, and serve a poorer segment of society that is unable to make larger deposits. A closer look at the structure of the BPR unit banks’ time deposits reveals that they frequently consist of just a few large deposits. In many cases, depositors are private persons or enterprises somehow related to the owners; sometimes the owners themselves deposit large sums. Thus at least part of the BPR unit banks’ deposits are not really

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