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)