State-owned Bank Mandiri said it will set aside credit worth Rp14 trillion ($1.55 billion) to finance the expansion of oil palm plantations and develop bio-diesel factories in 2007.
The credits will be about 36% of the total credits extended by banks for the plantations sector, bank director, Abdul Rahman, was quoted as saying by Antara. Bank Mandiri has already extended Rp21.5 trillion in credit to the plantations sector and related industries.
State-owned Bank Rakyat Indonesia (BRI) likewise said it is ready to extend up to Rp4 trillion ($439 million) in loans to the agricultural sector, including for the development of bio-fuel plantations across the country.
There are already 24 potential borrowers in the pipeline, managing some 120,000 hectares of oil palm and sugarcane plantations, BRI president Sofyan Basyir said.
"The total amount of loans will be around Rp3 trillion to Rp4 trillion. BRI plans to participate in the government's plan to revitalize the agricultural sector," Basyir was quoted as saying by The Jakarta Post on Monday (27/11/06).
The agricultural credit scheme will contribute to BRI's Rp16 trillion loan growth estimate for this year, and another 20% expansion in 2007. BRI reported outstanding loans of Rp86.7 trillion as of September.
As of mid-2006, BRI had also provided some Rp319 million in microcredit for solar home systems to some 3.4 million rural customers across the country.