Export funding scheme 'needs clarification'<\/p>\n
JAKARTA (JP): The mechanism for the government's latest
\nmeasure to provide Rp 2.5 trillion (about US$185 million) in
\nexport loans through 21 banks has yet to be clarified, according
\nto an official from a participating bank.<\/p>\n
\"The mechanism for the letter of credit (L\/C) guarantee scheme
\nis still not clear, so our bank has yet to take any action,\" said
\npresident of state Bank BRI Djokosantoso Moeljono following a
\nmeeting with the Investment Coordinating Board yesterday.<\/p>\n
He pointed out that the targeted exporters, the amount of
\ncredit per recipient, and the source of the financing had not yet
\nbeen specified.<\/p>\n
However, he added that BRI was ready and capable of
\nimplementing the program.<\/p>\n
The government signed a memorandum of understanding with 21
\nbanks to provide loans to the export-oriented industries in the
\ncountry on Wednesday.<\/p>\n
Although Finance Minister Bambang Subianto said the government
\nwould guarantee commercial loans issued by the banks, he did not
\nclarify how the loans were to be used.<\/p>\n
Also unclear was what kind of incentives would be put in place
\nto encourage banks to issue loans, but sources said that banks
\nparticipating in the scheme would be able to swap non-performing
\nloans for government bonds to the value of export loans issued
\nunder the scheme.<\/p>\n
The Minister of Trade and Industry said that eligibility
\ncriteria for the facility had yet to be established, but added
\nthat garment exporters could get priority because they have to
\nfollow the fashion seasons.<\/p>\n
Despite the sharp depreciation in the value of the rupiah
\nagainst the U.S. dollar, local exporters have failed to take
\nadvantage of these favorable conditions because of difficulties
\nobtaining imported raw materials.<\/p>\n
Although Bank Indonesia and some foreign governments have
\nstarted to guarantee L\/Cs opened at local banks over the past
\ncouple of months, exporters have continued to face difficulties
\nas a result of their inability to make up front payment in full,
\na condition demanded by local banks.<\/p>\n
Following the enforced closure of 16 private banks in
\nNovember, overseas banks began to reject Indonesian L\/Cs.<\/p>\n
Local banks demand up front cash because they doubt the
\nability of exporters to repay their dues at a later date.<\/p>\n
The government is also expected to provide loans to rebuild
\nthe country's distribution sector, shattered during the May
\nriots, in the near future. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/export-funding-scheme-needs-clarification-1447893297",
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"sponsor": "Okusi Associates",
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