Japan's Eximbank, Daiwa lend to RI

Japan's Eximbank, Daiwa lend to RI

TOKYO (AFP): The Export-Import Bank of Japan and Daiwa Bank
Ltd. will extend US$50 million in low-interest loans to small-
and medium-sized Japanese ventures in Indonesia, an Eximbank
spokesman said yesterday.

The spokesman said the arrangement between the two banks was
the first of its type and could serve as a model for future
cooperation with other Japanese banks operating in developing
countries.

Under the arrangement, Daiwa's two affiliates in Indonesia --
PT Bank Perdania and PT Daiwa Lippo Leasing Corp. -- will borrow
the funds from the Eximbank at 0.25 percentage points below the
London Interbank Offer Rate (Libor). The three-month Libor rate
is currently around 6.375 percent.

Bank Perdania and Daiwa Lippo Leasing will then onlend the
funds at rates between 1.5 points and two points above the
Singapore Interbank Offer Rate (Sibor), but still about one point
lower than its usual lending rates.

The spokesman said Daiwa would determine which companies could
borrow the funds and would also be responsible for credit
analysis.

While the government-owned bank has had similar arrangements
in the past with local banks in developing countries, the tie-up
with the Daiwa affiliates is the first such arrangement with a
Japanese bank.

Indonesia is already the biggest single recipient of Japan's
official development assistance. Indonesia is also the main
investment destination in Asia for Japanese companies on a
cumulative basis.