ADB signs $85m loan to help SMEs<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The Asian Development Bank (ADB), one of the country's major
\nlenders, said on Wednesday it had signed a US$85 million export
\ncredit agreement with six local banks -- including Bank Negara
\nIndonesia (BNI) and Bank Rakyat Indonesia (BRI).<\/p>\n
The credits, to be extended by the banks to small and medium-
\nsize enterprises (SMEs), were scheduled to be given earlier but
\nwere delayed primarily because of lending scandals at the two
\nbanks.<\/p>\n
David J. Green, ADB country director in Indonesia, said the
\nbank resumed the export credit facility after receiving
\nassurances that the lending problems at BNI and BRI had been
\ncorrected.<\/p>\n
\"Bank Indonesia has given us the assurance that corporate
\ngovernance at banks has improved,\" said Green.<\/p>\n
BNI and BRI, the country's second and fourth largest lenders,
\nrespectively, have made headlines in recent months because of
\nlending scandals.<\/p>\n
BNI became involved in a Rp 1.7 trillion lending scandal,
\nwhile BRI has been investigated for suspicious loans valued at Rp
\n294 billion. The cases exposed the poor internal control
\nmechanisms at the banks.<\/p>\n
After receiving assurances from the central bank, Green said
\nhe felt \"comfortable\" that the credit program could resume,
\nalthough the disbursement of the credits was still pending
\nfurther administrative work.<\/p>\n
Aside from BNI and BRI, Bank Mandiri, Bank Danamon, Bank Niaga
\nand Bank Bukopin are also included in the program.<\/p>\n
Shamshad Akhtar, ADB director general for Southeast Asia, said
\nthe program was part of the bank's integrated efforts to empower
\nSMEs across Indonesia.<\/p>\n
The SME sector not only has the resilience to weather various
\nshocks -- it was able to grow during the economic crisis when
\nlarger businesses suffered -- but it can also absorb huge numbers
\nof workers. Millions of people has been sent jobless since the
\neconomic crisis hit the country. The economy needs to grow by
\naround 6-7 percent per year (compared to the average growth of 4
\npercent during the past years) to be able provide enough jobs.<\/p>\n
Government data says that at present, there are more than
\nthree million SMEs in the country employing about 12 million
\nworkers.<\/p>\n
The export credit program will allow the six banks to obtain
\ninexpensive credit export facilities from the ADB, which they
\nwill then extend to SMEs as working capital.<\/p>\n
Law No. 9\/1995 on small enterprises defines small-scale
\nenterprises as those with net assets of up to Rp 200 million and
\nmaximum annual sales of Rp 1 billion. The law does not provide a
\ndefinition of medium-scale enterprises.<\/p>\n
According to a government publication, however, medium-scale
\ncompanies are those with annual sales of between Rp 1 billion to
\nRp 50 billion.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/adb-signs-85m-loan-to-help-smes-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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