Exporters unable to benefit from BEI
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)