Disbursement of credit halted

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)