The Indonesian banking sector is becoming more proactive in promoting green financing as part of achieving sustainable development. One of their efforts involves endorsing the disbursement of loans specifically for electric vehicles (EV).
Commitment to sustainable and EV ecosystem developments
PT Bank Central Asia (BC) has provided funding for battery-based electric motor vehicles, amounting to IDR 327 billion by March 2023, reflecting a remarkable 19-fold year-on-year growth.
Executive Vice President of BCA Corporate Secretariat and Communications Hera F. Haryn stated that this is a testament to BCA’s commitment to contribute to the EV ecosystem development in Indonesia. “BCA has also currently provided EV charging facilities at two BCA office locations, such as at Wisma BCA Foresta BSD and BCA KCU Pemuda Semarang,” Hera said, quoted by Kontan.co.id, on Wednesday (17/5).
Looking ahead, they are optimistic about the opportunities for increasing financing for electric motor vehicles, in line with the growing demand from environmentally conscious consumers, the growth of eco-friendly industries, and the support from the government and regulators.
It is worth noting that as of March 2023, BCA has disbursed loans totaling IDR 180.8 trillion to sustainable sectors, showing a year-on-year growth of 11.9 percent and contributing 25 percent to BCA’s overall financing portfolio. This includes green financing amounting to IDR 75.9 trillion and financing for SMEs IDR 104.9 trillion.
BCA actively supports sustainable financing across 12 categories of business activities, including renewable energy, energy efficiency, sustainable management of natural resources and land, environmentally friendly transportation, sustainable water and wastewater management, eco-efficient products, green buildings, and SMEs.
CIMB Niaga financing for EV soars threefold in Q1 2023
PT Bank CIMB Niaga Tbk, through its subsidiary CIMB Niaga Finance (CNAF) has also recorded an increase in financing for eco-friendly vehicles.
In the first quarter of 2023, CNAF’s financing for EV reached IDR 22.8 billion, marking a three-fold increase and a remarkable 199 percent growth compared to the same period in last year, which amounted to IDR 7.6 billion.
CNAF’S president director Ristiawan Suherman is optimistic that financing for EV will continue to grow in the next quarter.
Therefore, they have implemented strategies to boost financing for EV this year such as applying an interest rate of approximately 100 bps, which is lower than conventional financing.
“We will also expedite the application process and simplify the required documents to further enhance the growth of financing for eco-friendly vehicles,” Ristiawan said.
KB Bukopin impressive support through dealer financing
Bank KB Bukopin has provided financing for EV through the Dealer Financing scheme, totaling 753 units and reaching IDR 584 billion by April 2023.
The Head of Asset Management & Procurement at KB Bukopin I Putu Adi Saputra said that the proportion of EV financing from the total disbursement of Vehicle Loans (KKB and Dealer Financing) is approximately 20 percent.
“Currently, there are no specific interest incentives provided for EV financing, however the interest rates are generally lower compared to regular vehicle loans,” Adi said.
According to Adi, due to the increasing competition among vehicle manufacturers to introduce fully electric and electrified (hybrid) vehicles, KB Bukopin is optimistic that vehicle sales will continue to rise.
“We hope that EV financing will grow by 20 percent to 30 percent this year compared to last year,” Adi added.
