Eastern Indonesians to get bank loans

Eastern Indonesians to get bank loans

JAKARTA: The country's banks have eased their loan rules to allow
entrepreneurs in the eastern part of Indonesia to obtain loans
with less restrictions, according to Sate Minister for the
Acceleration of Development of Eastern Indonesia Manuel Kaisepo.

"Previously, the banks' regional branches were only allowed to
give a maximum loan of Rp 300 million (US$36,000). Above that
amount, they (the entrepreneurs) have to fly to Jakarta to seek
approval from a bank's headquarters.

"It is thus a high-cost effort to get loans," the minister
said on the sidelines of a three-day regional investment forum on
Thursday.

Kaisepo explained that after several meetings with some banks,
it was agreed that entrepreneurs from eastern Indonesia could
request up to Rp 2 billion for a loan without having to seek
approval from Jakarta.

He did not specify which banks, however.

The eastern part of Indonesia is relatively poorer and less
developed than western parts of Indonesia where most of the large
Industrial centers and main government offices, such as Medan and
Jakarta, are located.

As a result most of the development projects have been
concentrated on the islands of Java and Sumatra over the past
several decades.

The government is now seeking to boost development on the
eastern islands and has appointed a minister especially tasked to
handle the matter.

Kaisepo added that some banks also agreed to provide loans to
fishermen and farmers in the region.

"We are looking for the best formula to establish a fund that
will guarantee the repayment of loans channeled to those groups
of people," he said.

"For example, local administrations may allocate some Rp 5
billion out of their budgets to set up the fund." --JP