ADB to lend $42m to RI's small businesses

ADB to lend $42m to RI's small businesses

JAKARTA (JP): The Manila-based Asian Development Bank (ADB)
will provide US$42 million in loans to support small businesses
in Indonesia.

Bank Indonesia Governor J. Soedradjad Djiwandono said on
Thursday that the loans will be channeled through a secondary
bank known as Bank Perkreditan Rakyat (BPR).

Soedradjad said that about $25 million will be provided in the
form of soft borrowing, carrying a lower interest rate with a
longer maturity than the other $17 million, for a program called
a micro credit project.

He said the project is part of the central bank's program to
support secondary banks, which are mostly located in the
districts.

The project is expected to provide credit for about 300,000
small-scale businesses, each with assets of less than Rp 10
million ($4,650), he told a hearing with the Budgetary Commission
of the House of Representatives.

The micro business project will be carried out in five
provinces: West, Central and East Java, West Nusa Tenggara and
South Kalimantan.

ADB said in Manila yesterday that it had approved an $85
million loan to Indonesia to provide latrines and water supply
facilities for the poor in the provinces of Kalimantan and
Sumatra.

The loan will come from the ADB's ordinary capital resources.
Annual interest is at 6.11 percent. It will be repaid over 25
years, including a grace period of five years.

An ADB statement said 15 percent of the country's population
lived below the poverty line, including the three million people
who stand to benefit from the project.

Indonesia's rural communities have a shortage of clean water
and toilet facilities. This leaves the population vulnerable to
water-borne diseases such as diarrhea, one of the main causes of
child mortality, it stated.

The project will also lessen the burden of carrying water
"which mainly falls on women and children," AFP quoted the
statement as saying.(hen)