Exporters unable to benefit from BEI

JAKARTA (JP): Exporters have been unable to benefit from the newly established, state Bank Expor Indonesia (BEI) due to the bank's strict lending terms, the secretary general of the Indonesian Textile Association (API) said.

API's secretary general, Irwandy Muslim Amien, admitted that exporters have been reluctant to apply for loans from BEI as the bank imposes terms many exporters could not comply with.

"BEI, for example, refuses to give loans to companies that have bad debts," Irwandy added.

Irwandhy found this term insensitive because most companies now have bad debts due to the economic meltdown.

BEI was established in May with a paid-up capital of Rp 3 trillion (US$375 million at the current rate) to help finance the import of raw materials for export oriented companies.

Irwandhy was quoted by Bisnis Indonesia as suggesting last week that BEI should be able to distinguish between companies whose bad loans arose due to mismanagement and ones that had suffered simply because of the currency crisis.

Furthermore, he said, many companies with bad debts could still get export orders though they had to operate below designed capacity.

He said if every company with bad debts was automatically denied access to new credit, the economy would never recover.

He added that some 1,500 textile-related companies with total debts of Rp 7.9 trillion had now been put under the Indonesian Bank Restructuring Agency (IBRA).

If all these companies were denied access to new loans, the impact would be devastating because textile and garment exports totaled $7.8 billion last year, up from $7.3 billion in 1997.

"Who's going to benefit from BEI if most exporters can't?" he asked.

Irwandy suggested that the government establish an emergency scheme to enable exporters with bad debts to get new loans from BEI.

Exporters doubted the ability of the bank to help them, especially after its executive said that the bank would provide its loans through other banks.

They were afraid that the two-step lending process would only increase costs and add red tape.

However, BEI's president Bambang Hendrajatin assured companies last month that though the bank lends its funds through other commercial banks, their lending rates were still lower than market rates.

According to BEI, most of its loan financing was derived from low interest credit from the Japan Export and Import Bank, the World Bank and the Asian Development Bank. (03)