KBC Loan Project The project entails a financing package of up to US$150 million in total, to PT KB Finansia Multi Finance (FMF) (an Indonesian multi finance company (MFC)) and KB J Capital Co., Ltd. (KBJ) (a consumer financing company in Thailand), which comprises (i) A loan of up to US$75 million in IDR equivalent to FMF against a corporate guarantee from KB Kookmin Card Co., Ltd. (KBC), (ii) A loan of up to US$25 million in IDR equivalent to FMF without a guarantee, and (iii) A loan of up to US$50 million in THB equivalent to KBJ against KBCs corporate guarantee (the Project). The Project is aimed at supporting (i) FMF in expanding micro, small and medium enterprises (MSME) lending and (ii) KBJ in expanding financing for mobile devices with a focus on the less developed regions (North, Northeast and South regions in Thailand) to support digital inclusion in Thailand. The Project will strengthen the ongoing relationship between KBC and IFC in Indonesia and will demonstrate a success case of expanding the partnership into the other country after solidifying the relationship in one country. The solid partnership with KB Financial Group (KBFG) is expected to potentially generate additional high impact investments in priority countries for IFC. Project Level Outcome (FMF) - Increased access to finance for MSMEs with a focus on SCF in Indonesia:  IFCs forthcoming MSME finance gap report estimates the overall MSME finance gap to be US$234bn or about 23% of the countrys GDP. MSMEs in supply chains in Indonesia face additional barriers with limited access to finance to obtain the capital required to fulfill demands from large orders due to underdeveloped SCF market. Supported by the Project, FMF will expand their SCF business and in effect provide better quality of credit to MSMEs which best fit their needs, to a wider group of SME clients. Furthermore, IFC estimates that SME lending spurred by the Project through FMF will create between 8,100 and 12,700 jobs in the economy over the next 3 years. By improving access to finance for MSMEs, the Project will promote MSME growth, and catalyze job creation.
Project Level Outcome (KBJ) - Increased access to finance for mobile devices with a focus on the less developed regions in Thailand: Despite the progress in financial inclusion in Thailand, disparities across and within regions contribute to overall inequality in the country. For many individuals in the less developed regions, internet-enabled mobile devices remain the primary sources of internet access and are thus an important lever in narrowing the digital divide and providing access to digital social and financial services. For low-income end users, even the cheapest handsets available on the market can be out of reach if they must pay for them upfront in cash. With IFCs support, KBJ will grow financing for mobile devices primarily in the less developed regions, contributing to providing affordable financing schemes for mobile devices especially in those underserved regions, and promoting digital inclusion.
Market Level Outcome (FMF)  Competitiveness: The proposed investment is expected to promote greater competitiveness in the SCF market for MSMEs in Indonesia through demonstration and replication channels. This constraint is especially severe for standalone firms, smaller-sized suppliers and distributors in supply chains. While most global FIs serve multinational corporates in SCF, only a few local FIs (primarily banks) have started to launch SCF programs, albeit with a primary focus on large corporates and larger-sized SMEs, despite the huge market potential in Indonesia estimated at around US$80bn. Currently there are limited product offerings to smaller MSMEs. MFCs such as FMF, which have experience in catering to MSMEs and providing customized products that suit their needs, are well-positioned to serve the MSME segment which is underserved by banks, while MFCs participation in this field is very limited. The Project will ensure greater access to finance for underserved MSMEs in the supply chains and create competitive pressure on market to adopt and replicate similar SCF models.
Market Level Outcome (KBJ)  Competitiveness:  The Project will promote greater competitiveness in the mobile device finance market in Thailands less developed regions through demonstration and replication channels. While banks dominate the financial sector, their lending is biased towards large corporates and urban areas, and they lack incentives and strategic focus to develop targeted product offerings that cater to underserved segments. By supporting KBJ, a growing player in the less developed regions, this Project will demonstrate to other FIs the viability of a business model that contributes to improved affordability of mobile devices in the less developed regions, creating a more competitive financing market for this segment and increased penetration of the digital economy.