Disbursement of credit halted

MANADO, North Sulawesi: North Sulawesi Bank has temporarily halted the disbursement of credit funds for clove peasants following reports of some Rp 15.4 billion in bad loans involving 70 village cooperatives in the province.

The total credit awarded to the 70 cooperatives last year was Rp 24.1 billion, some Rp 15.4 billion of which has not yet been returned, North Sulawesi Bank director J.H. Lumintang said.

"From the 70 cooperatives, we have proof that 35 of them have breached the deal by not buying the cloves (from the peasants) at all," Lumintang said, adding that the cooperatives were only charged with 17 percent interest instead of the usual 22 percent.

He also said that the bank has set a deadline for the 35 defiant cooperatives to pay their loans in cash by August this year.

"If they do not comply with the deadline, we will pursue the cases through legal means," Lumintang added. (48/edt)