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.