Japan lends $490m to RI

Japan lends $490m to RI

TOKYO (AFP): The Export-Import Bank of Japan announced yesterday a loan of 53 billion yen (US$490 million) to Indonesia to finance capital investment by small-scale enterprises including venture capital companies.

The Japanese government-owned bank said the loan would provide medium- and long-term funds to such enterprises as well as Indonesian financial institutions including state-owned banks and private banks.

"This loan is also expected to help develop the domestic financial market as a source of stable medium-to-long-term funds," a statement said.

Small-scale enterprises employed almost 90 percent of the Indonesian workforce or 70 million people in 1994, accounting for an estimated 15 percent of gross domestic product (GDP) the following year, the bank said.

The Indonesian government has highlighted the promotion of such enterprises in its current 25-year development plan which started in 1994.

Support measures include giving tax breaks to venture capital companies, developing the domestic capital market and requiring commercial banks to extend at least 20 percent of their loans to small enterprises, defined as those with total assets not exceeding Rp 600 million ($250,000).