BEI to boost export credit by 85 percent

JAKARTA (JP): State Bank Ekspor Indonesia (BEI) plans to increase its lending in 2001 by 85 percent to Rp 11.95 trillion (US$1.2 billion), up from Rp 6.4 trillion in 2000, bank president Bambang Hendrajatin said here on Tuesday.

Bambang said the bank would extend fresh loans of about Rp 5.55 trillion this year, most going to strengthen the working capital of export-oriented companies.

He said the loans would be directed to several business sectors, including those related to the production of timber, plywood, shoes, crude palm oil, textiles and textile products, rubber, pulp and paper, frozen fish, electronics and furniture.

The bank's vice president, Julhandiarso, said that between 1999 and 2000 BEI had no difficulties collecting loan payments from appointed banks, which indicated that these banks had no problems in being paid by the exporters who were extended the loans.

He added that the bank's profit was expected to increase to Rp 223 billion ($23.47 million) from Rp 173 billion in 2000 due to the expansion of loans.

BEI was established in early 1999 to help export-oriented companies by channeling loans to these businesses. Unlike a conventional bank, the institution is not allowed to raise funds from the public to finance its activities.

The bank instead obtains funds from bilateral and multilateral foreign financial institutions.

BEI extends its loans through appointed banks because the law does not allow it to extend the loans directly to exporters.

To date, the bank has obtained over $1 billion in financing from Japan Bank for International Cooperation, of which some $250 million must be repaid by November. (05)