Jasa Marga loses Rp 2.1b in markup

Jasa Marga loses Rp 2.1b in markup

JAKARTA (JP): PT Jasa Marga, the state-owned toll-road developer and operator, has lost Rp 2.1 billion (US$917,030) in bad credits due to mark up practices by some officials of the Ministry of Cooperatives and Small Enterprises, a spokesman said.

Jasa Marga's public relations officer, Yunial Harun, told newspeople that the loss incurred in its lending programs for small firms and cooperatives had been caused mainly by officials who pocketed part of the loans originally extended to small borrowers.

"Some officials in charge of administering loan applications from small borrowers to Jasa Marga had deliberately marked up the sums of the loans asked for and pocketed the balance," Yunial said.

The provincial offices of the cooperatives ministry are the only institution in Indonesia's 27 provinces authorized by the government to distribute small-scale credits from state-owned companies, including Jasa Marga, to small-scale businesses and cooperatives.

"Every soft loan to be given by state firms to small businesses and cooperatives has to be endorsed by them," Yunial said.

Jasa Marga and all other state-owned companies have been required by the government to set aside up to 5 percent of their net earnings for helping small businesses and cooperatives.

Yunial said several cooperatives officials apparently have abused the authority by inflating the sums of the loans written on the application forms.

Citing an example, he said a small-scale businessman wanted to get a loan of Rp 2 million from Jasa Marga and an official in charge of administering the application marked up the loan to Rp 3 million and pocketed the balance.

"When the borrower asked the official to repay the balance upon the maturity of the loan, the official simply said the loan should not necessarily be repaid because Jasa Marga will not take any measures against defaulting borrowers," he said in recounting one instance.

Commenting on Jasa Marga's complaints, Minister of Cooperatives and Small Enterprises Subiakto Tjakrawerdaya said yesterday that he will deal firmly with officials committing mark up practices.

"I'll move against the officials," he told the press.

Mark up practices are reportedly common in Indonesia and have been cited as one of the reasons behind the Rp 9.9 trillion in bad credits suffered by banks until June this year. (13)