IFC lends $10 million to Panin Overseas

JAKARTA (JP): The International Finance Corporation (IFC), an affiliate of the World Bank, has approved a loan of US$10 million to PT Panin Overseas Finance, a multi-financing division of the Panin Group.

Panin said in a statement that under an agreement signed yesterday, IFC's financing package, which will be used to fund leasing contracts with small and medium-sized businesses, consists of a loan of $6 million from its own account and a syndicated loan of $4 million.

The main business of Panin Overseas Finance, a publicly-listed company on the Jakarta Stock Exchange, is leasing, factoring and consumer finance.

"Long-term leasing is an effective way to channel funds to small and medium enterprises," the statement quoted Peter Cook, director of IFC's Asia Department, as saying.

"The financing package will address the shortage of long-term debt funding for Indonesian leasing and financing companies. It will provide medium-term funds which the company cannot obtain from other sources. IFC's involvement is expected to benefit over 40 Indonesian firms," Peter added.

IFC is a shareholder in the company, having recently invested $1.9 million in the share capital.

IFC is the largest multilateral institution of the World Bank and is the largest multilateral source of equity and loan financing for private sector projects in developing countries.

Panin Overseas Finance, after offering its shares to the public in April, is 34.59 percent owned by PT Panincorp, 27.75 percent by PT Panin Investment Enterprises Ltd., 10.60 percent by PT Usasli, 4.12 percent by DPK Panin Bank and 22.94 percent by the investing public.

Panin Overseas Finance recorded an after-tax profit of Rp 3.63 billion ($1.59 million) in the first six months of this year and total assets of Rp 167.3 billion as of June.(31)