Hamzah urges banks to resume lending role
Hamzah urges banks to resume lending role
The Jakarta Post, Jakarta
Vice President Hamzah Haz urged bankers to immediately start
providing credit for the business sector to "repay" the public
for the money spent to finance troubled banks following the
financial crisis in the late 1990s.
"I expect the bankers to pay for the cost of the crisis by
giving credit, so the results can be enjoyed by the public," he
said on Thursday.
Speaking at the opening of the sixth national convention of
the Indonesian Chamber of Commerce and Industry (Kadin), Hamzah
said that the initial reason for the disbursement of the Bank
Indonesia Liquidity Support (BLBI) to the banking industry was to
revive the intermediary role of the banks.
But he was quick to add that the government would not
intervene in the banking industry by forcing them to boost loans
to the business sector.
The government injected billions of dollars worth of public
funds into the banking sector to bailout the industry during the
crisis. The taxpayers via the state budget had to shoulder the
cost.
Despite the improvement in the country's macroeconomic
conditions as reflected in the stable rupiah, low inflation and
interest rates, the banking sector has largely declined to boost
new lending to the corporate sector. Bankers argue that lending
to the corporate sector is still risky due to slow progress in
the restructuring of corporate debt.
Hamzah said that the rising stability in macroeconomic
indicators should be seen as a momentum by bankers to help revive
the corporate sector.
He said that if the corporate sector could obtain funds from
banks to expand their business operations, it would help the
overall economy and bring in higher tax revenue for the
government.
Hamzah, the leader of the United Development Party, also urged
Kadin to pioneer efforts toward developing small and medium
enterprises, which make up about 95 percent of the country's
businesses.
"Through its associations, Kadin should be able to boost the
business sector and provide inputs for the banking sector," he
said.