BEI channels $5 million in first export credits
BEI channels $5 million in first export credits
JAKARTA (JP): Newly established Bank Expor Indonesia (BEI) has
channeled a total of US$5 million in export credits since it
began operations on Sept. 1, a bank official said here on
Thursday.
Speaking during a break in the 1999 Export Forum here, BEI
director Budi Mulya said the credits were channeled to four
export-oriented companies through a third-party bank.
"We channeled the money to the four companies through Bank
CIC," Budi said. Bank CIC is Bank Century Intervest Corporation
He said BEI expected to gradually increase its export credit
financing to $70 million per month.
BEI was established in May with paid-up capital of Rp 3
trillion (about $425 million at the current exchange rate) to
help finance the import of raw materials for export-oriented
company.
Several exporters expressed skepticism earlier this month
about the benefits of BEI, saying that providing funds through
third-party banks would only increase the costs of loans.
Budi defended the two-step lending process, but conceded that
channeling export credits through third-party banks marginally
raised the cost of the loans.
He said as a new bank, BEI still lacked the facilities and
personnel to provide the credits directly to exporters.
Budi estimated some 22 banks had agreed to cooperate with BEI
in channeling funds to exporters.
"We've discussed our idea with the banks' management, but we
haven't yet detailed the cooperation on a operational level," he
said.
Without naming particular banks, he said state banks may soon
begin channeling BEI loans.
Budi also said BEI planned to become a direct funding bank,
but he declined to say when this would occur.
"We've already forwarded the legal aspects of the plan to the
government, but we're still waiting for the new government to be
formed," Budi said.
Responding to criticism of the high margin BEI has set on its
loans, Budi said that as a company accountable to its
shareholders it must obtain a good rate of return on assets
(ROA).
"In setting the margin we refer to three factors: proficiency,
ROA and overhead costs," he said, adding that the bank's rates
are still competitive in the market.
Aside from having received funds from the government, the bank
is also expected to obtain some $1 billion from the Japan Export
Import Bank.
"The funds have been on standby for a year now and we expect
they will soon be available to us," he said.
The bank's office is located in Tower II of the Bursa Efek
Jakarta Building on Jl. Sudirman in Central Jakarta and currently
employees 70 people.
In its company profile, BEI describes itself as a nondirect
lending and noncompetitive bank.
Working capital credits and export credits are channeled
through appointed banks, which bear all the risks.
Budi said BEI also provided loans under cofinancing schemes
with other commercial banks.
The 1999 Export Forum was held on Thursday in conjunction with
the 14th National Merchandise and Commodity Show at the Jakarta
Fair Grounds in North Jakarta, which opened last Wednesday.
The five day show, with the theme Resource Indonesia '99,
includes exhibits of textile products, chemicals, plastic goods,
cosmetics, handicrafts and agricultural products.(03)