DBS Inks Sustainability-Linked Loan in Indonesia

1 min readUpdated Jun 4, 2025Aug 9, 201911:21 PM

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The export financing sustainability-linked loan is the first of its kind in Indonesia. DBS Bank Indonesia has signed a sustainability-linked export financing loan with wooden door manufacturer PT Sumatera Timberindo Industry (STI), the bank said in a press release on Wednesday.

DBS said the loan is evaluated based on a target of obtaining timber and raw materials from sources certified by the Forest Stewardship Council (FSC). Its interest rate will be reduced for each shipment of raw material that has an FSC certification that the raw material is responsibly sourced.

STI is a FSC-certified company focused on responsible sourcing, manufacturing and exporting of sustainable-certified products. According to director Hidayat Ang, STI’s synergies with DBS in advancing sustainability support the company’s long-term growth and empower the local community to do good for the environment.

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What this means

DBS's pioneering sustainability-linked loan in Indonesia is a strategic and likely effective move, positioning the bank as an early mover in green finance. By directly tying interest rates to FSC certification, DBS creates a clear financial incentive for sustainable sourcing, pressuring competitors to develop similar offerings to attract environmentally conscious clients. Unlike typical bank expansions, this move focuses on product innovation rather than store count, reflecting a shift towards integrating ESG into core services. This approach differentiates DBS from rivals focused solely on traditional lending or geographical expansion like Panpuri's 16-store Asian rollout. The specific thing to watch next is the emergence of similar tailored financing products from other banks in the next six to twelve months.

Minjun Park · Retail News Asia newsroom

Questions & Answers

What is the key condition for PT Sumatera Timberindo Industry to receive a lower interest rate on this loan?

The interest rate on the loan will be reduced for each shipment of raw material that possesses Forest Stewardship Council (FSC) certification. This confirms that the materials have been sourced responsibly.

What kind of company is PT Sumatera Timberindo Industry and what is its focus?

PT Sumatera Timberindo Industry is a wooden door manufacturer that is FSC-certified. The company's primary focus is on the responsible sourcing, manufacturing, and exporting of sustainable-certified products.

What is significant about this specific sustainability-linked loan in Indonesia?

This particular export financing sustainability-linked loan is highlighted as the first of its kind to be signed in Indonesia. It sets a new precedent for similar financial arrangements in the country.

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