Bank consortium to help export-oriented firms

JAKARTA (JP): Minister of Industry and Trade Luhut Pandjaitan said on Tuesday the government planned to set up a consortium of two state and seven foreign banks to provide financing facilities for export-oriented firms.

Luhut said state Bank Mandiri and Bank Negara Indonesia 46 (BNI) would be part of the consortium, with Mandiri expected to be the lead arranger.

"I've met Robby Djohan (Bank Mandiri president) to discuss how to utilize his bank's overliquidity to help finance export- oriented firms," Luhut said during a dialog at a national meeting of the Indonesian Chamber of Commerce and Industry (Kadin).

Mandiri is the country's largest bank and was formed through the merger of four state banks last year -- Bank Bumi Daya (BBD), Bank Dagang Negara (BDN), Bank Expor Impor Indonesia (Exim) and Bank Pembangunan Indonesia (Bapindo).

He said Mandiri owned some Rp 12 trillion in excess liquidity which could be used to boost the country's export activities.

He did not disclose how much the government expected to raise from Mandiri or the consortium.

"The question now is how to raise the funds."

Luhut said Mandiri would try to raise as much as possible without disrupting its capital adequacy ratio (CAR), which is the ratio between net equity and risk-weighted assets.

The institution's current CAR is more than 12 percent, above the government-required minimum of 4 percent.

Luhut said he had yet to be informed about the identities of the foreign banks.

The government last year established Bank Expor Indonesia (BEI) with a paid up capital of Rp 3 trillion (US$375 million) to help finance the import of raw materials for export-oriented companies.

Despite skepticism from the business community, the bank expected to gradually raise its export credit financing to $70 per month.

The newly appointed minister has said his priority is to increase export revenue to help in stimulating economic recovery.

During his first week as minister, Luhut met with several industrial associations to discuss ways of boosting their exports.

His ministry is identifying companies with potential to generate export revenue but in need of export capital, Luhut said.

He previously said the government had classified 16 dominant export commodities exclusive of oil and gas, such as textiles, wood and electronic products.

According to the Central Bureau of Statistics, the value of non-oil and gas exports rose 29.62 percent in the first quarter to US$10.75 billion from $8.29 billion a year earlier.

The consortium, Luhut added, would also provide funding for small and medium enterprises "although the amount will be small".(bkm)