Exporters to get cheaper loans

Exporters to get cheaper loans

JAKARTA (JP): The government will soon enter into a deal with
eight healthy domestic banks designed to provide exporters and
distribution companies with Rp 2.5 trillion (US$192.31 million)
in cheaper loans, Finance Minister Bambang Subianto said
yesterday.

"The agreement will be signed in the next couple of days," he
said after presenting the revised state budget for 1998/1999 to
the House of Representatives (DPR).

The eight banks involved in the scheme are Bank Negara
Indonesia, Bank Rakyat Indonesia, Bank Bali, Bank Lippo, Bank Pan
Indonesia, Bank Buana Indonesia, Bank Internasional Indonesia and
Bank Niaga, sources said.

The loans would be issued at interest rates below current
market levels, bankers said.

They added that the government would compensate the
participating banks by allowing them to swap non-performing loans
for government bonds, yet to be issued, up to the value of the
cheap loans which they issued under the scheme.

Indonesian exporters have failed to benefit from the sharp
depreciation of the rupiah against the U.S. dollar because they
have to provide local banks with up-front payment in full in
order to obtain a letter of credit to import raw materials.

The distribution sector is also facing difficulties as a
result of serious damage inflicted during the May riots. (rei)