Banks reluctant to give loans to shipping firms
Banks reluctant to give loans to shipping firms
JAKARTA (JP): The reluctance of banks to provide loans for
shipping companies has hampered the development of the country's
maritime industry, a banking leader says.
"There is a substantial gap between supply and demand for sea
transportation credits," chairman of the Advisory Council of the
Association of Private Domestic Banks, I Nyoman Moena, told a
seminar yesterday.
The seminar discussed changes in sea transportation after the
implementation of Shipping Law/1992, which becomes effective this
September.
"The gap likely occurs because banks apparently fear the risks
faced by shipping firms," said Moena, who is also president of PT
Surveyor Indonesia, a state-owned company.
He acknowledged that the current high interest rates are also
discouraging to shipping firms, which in general operate on small
profit margins.
Shipping business also generally have unstable cash flows and
face problems related to complicated procedures and bureaucracy,
he said.
"Nevertheless, the banking industry has as well several
weaknesses such as its lack of approach to sea transportation
businesses," he said.
According to Moena, related government institutions and
business associations should cooperate to support the expansion
of banking loans for the development of the shipping industry.
Measures
"The Ministry of Transportation, Bank Indonesia, the central
bank, commercial banks, PT PANN Finance, the state-owned finance
company, and the Indonesian Ship-owners Association (INSA) should
establish measures to support financing for the maritime
industry," he said.
"The quality, prices and delivery of domestic shipbuilding
companies are now competitive with foreign firms," he said.
Meanwhile, Director General of Machine, Metal and Electronics
Industries Effendie Soedarsono told the seminar that Indonesia
currently has 200 shipyards, including 18 owned by the
government, with a combined annual capacity to build ships of
140,000 tons and repair ships with a total weight of 2.5 million
tons.
He said the shipyards are expected during the current Sixth
Five-year Development Plan (Repelita VI) to construct new vessels
worth Rp 3 trillion (US$1.39 billion). Some of their products,
worth about $450 million, will be exported.(icn)