Banks join loan program

Banks join loan program

JAKARTA (JP): Five private local banks have joined the loan
portfolio guarantee (LPG) program aimed at improving small
businesses' credit provisions.

The five banks -- PT Bank Umum Nasional, Bank Niaga, Pan
Indonesia Bank (PANIN), Bank Dahanutama and Bank NISP -- are
currently participating in a five-day workshop on micro-
enterprises and small business finance, sponsored by the United
States Agency for International Development (USAID).

The USAID-sanctioned LPG program, which last year guaranteed a
loan portfolio of US$11.5 million, covers up to 50 percent of a
participating bank's net losses on a loan principal, should the
qualified borrowers default.

"In this way, the bank's risk is reduced but not eliminated,"
said a statement released at yesterday's workshop opening. (rid)