Indonesia state-owned financial services provider PT Bank Mandiri has established a corporate venturing subsidiary dubbed Mandiri Capital with a commitment of Rp 500bn ($36.5m), DealStreetAsia reported on Sunday.
Mandiri Capital, which is expected to begin investing next year, will primarily seek out startups working on payment services aimed at e-commerce platforms.
The firm is currently in the process of selecting a team to head the unit.
The creation of Mandiri Capital comes ahead of anticipated legislation in the country that would require financial services firms to invest 70% of their capital in startups to make up for a shortfall of options of conventional bank loans.
In February 2015, Indonesia’s minister of communication and informatics Rudiantara said the government expects the private sector to invest $1bn in technology startups over the next five years.
Budi Gunadi Sadiki, chief executive of Bank Mandiri, said: “There is an enormous chance in the country because we are seeing local startups growing, especially in the e-cash business.”