Loan syndication formed to help export companies
Loan syndication formed to help export companies
JAKARTA (JP): Two state banks and at least seven foreign banks
have agreed to establish a loan syndication to provide Rp 50
trillion (US$6 billion) in credit facilities for export-oriented
firms.
Minister of Industry and Trade Luhut Pandjaitan said he
expected the credit from the consortium would start to flow by
next month.
"We want the consortium to start working as soon as possible,"
he told reporters following a meeting with trade associations and
bankers.
He said that state Bank Mandiri and Bank Negara Indonesia 46
were part of the consortium, with Mandiri acting as the lead
arranger.
It was unclear how much each bank would contribute to the
financing facility.
Luhut has said that Bank Mandiri owned some Rp 12 trillion in
excess liquidity, which he expected to use as export funds.
Bank Mandiri is the country's largest bank and was formed
through the merger of four state banks last year -- Bank Bumi
Daya (BBD), Bank Dagang Negara (BDN), Bank Expor Impor Indonesia
(Exim) and Bank Pembangunan Indonesia (Bapindo).
However, he fell short of naming the consortium's foreign
banks, citing only the British Standard Chartered Bank and the
American Citibank.
He said the funds would be mainly channeled to export oriented
firms from the textile industry, the steel industry and the
electronic industry, among others.
"We've identified 16 export oriented industries that could
obtain the funds," he said.
When asked about the maximum amount of funds foreign banks had
promised, he said that the amount would depend on demand from the
Indonesian side.
"In fact they placed no limits," he said.
Luhut has repeatedly stated his priority to boost the
country's exports, believing that it would pull Indonesia out of
the economic crisis.
The government has already established Bank Expor Indonesia
(BEI) in 1999 with a paid up capital of Rp 3 trillion (US$361
million) to help finance the import of raw materials for export-
oriented companies.
Luhut assured he had no plans yet to abolish BEI, but added
that he would review the bank's functions.
"It seems that BEI is not functioning as it should be," he
said.
Exporters have raised skepticism over BEI's effectiveness,
saying the bank's loan mechanism has discouraged them from using
its service.
However, BEI director Budi Mulya said the bank had thus far
channeled some Rp 845 billion in export credit to over 15
businesses.
"We have over 100 exporters," Budi said.
He expected to provide exporters with some Rp 2.5 trillion in
credit this year, despite the presence of new funds sources from
the consortium.
Chairman of the National Business Council (DPUN) Sofyan
Wanandi said the government expected to boost economic recovery
through export earnings.
"We start with the exporters because all they need is working
capital," he said.
Sofyan said that exporters welcomed the new consortium as it
offered them a direct channel to needed working capital.
While foreign banks, he added, view the consortium as an
opportunity to channel their loans with a lower risk of bearing
nonperforming loans.
"These exporters already have the goods and the markets," he
said.
Sofyan said the consortium would continue to offer loans until
Indonesia's exports reach their normal level of some US$50
billion a year.
Furthermore, he said, the government had allowed companies
currently under the Indonesian Bank Restructuring Agency (IBRA)
to benefit from the export facility.
"As long as the companies can either absorb many laborers or
are export oriented," he said.
Aside from helping exporters, the consortium will also provide
funds to small and medium-sized companies, he said. (bkm)