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Suwhono, the President Director of Pegadaian

Interview - November 28, 2011
'We are the leaders in the microfinancing industry'

While the worldwide banking system endures a tough period and struggles to recover from the recessionary storm, there are various success stories that outline how many financial institutions are working flat-out to overcome these challenging times.

Perum Pegadaian, established in 1901, is the leading Indonesian pawnbroker and an alternative financial service provider. The state-owned company carries the motto “Mengatasi Masaiah Tanpa Masaiah” (to overcome problems without problems) and now employs 18,300 people.

Since its inception, Pegadaian has striven to assist the Government’s programme to improve people’s welfare by providing the best financial solutions through the distribution of loans to micro and small-scale businesses. Suwhono, the president director of Pegadaian, here discusses the present and future plans of the company.

What are some of the milestones of Pegadaian?

Perum Pegadaian is one of the oldest state-owned companies in Indonesia. It is now 110 years old, having been established on April 1, 1901. We are the leaders within the microfinancing industry in Indonesia.

Within the last five years, from 2006 to 2011, Pegadaian grew an average of 35 per cent per year. Its profit grew by about 38 per cent at that time, with about 21 million customers by December 2010. We have around 4,920 outlets throughout the country, present in all places, from village to city.

Did the recent global financial crisis affect your business? 

No, it did not affect our business. Our customers are, for the most part, in the mid to lower classes; this is a very cash-run society.

Furthermore, we have issued many bonds – this year alone 2 trillion were covered. Pegadaian is testing the market in this respect.

How sustainable is your business?

There is a lot of potential in Indonesia. We got involved in microfinancing and now we contribute to the improvement of local businesses.

We are interested in helping anyone who wants to use our wide network and financial programmes to grow their business.

Is an initial public offering (IPO) possible?

This year we changed our regulation. We will very soon become PT and after that the next step will be TBK, meaning listed. We are just in the process of closing the books. The company is really ready for an IPO. It depends on Parliament now.

Do you have any examples of success to share?

There are many success stories here. A lot of students owe much of their education to the support of their parents using Pegadaian’s services.

We are also engaged in corporate social responsibility for example; we are participating in the one million trees programme, planting trees in collaboration with the Ministry of Forestry, from which we get the seeds.