Local banks agree to help export-oriented companies

JAKARTA (JP): The government signed yesterday a memorandum of understanding with 21 local banks to provide loans worth about Rp 2.5 trillion (US$185.2 million) to help revive export-oriented industries.

Minister of Finance Bambang Subianto said the banks were relatively healthy and had the capacity to provide the loans, which would be guaranteed by the government.

"The agreement is part of the government's efforts to revive the real sector of the economy," he said following the signing of the MOU agreement. The real sector usually refers to everything except finance.

The 21 banks Bank Artha Graha, Bank Bali, Bank Buana Indonesia, Bank Bukopin, Bank DKI, Bank Duta, Bank Dharmala, Bank Internasional Indonesia, Bank Lippo, Bank Niaga, Bank NISP, Bank Panin, Bank Tamara, Unibank, Bank Negara Indonesia, Bank Ekspor Impor Indonesia, Bank Bumi Daya, Bank Dagang Negara, Bank Rakyat Indonesia, Bank Pembangunan Indonesia and Bank Tabungan Negara.

Bambang said the agreement was also expected to support the liquidity crunch currently plaguing exporters due to the sharp fall of the rupiah against the U.S. dollar.

Bank Indonesia director Subarjo Joyosumarto said yesterday the loans would total about Rp 2.5 trillion. This is expected to increase in the coming months as more banks join the lending consortium.

The minister of finance said the loans would carry commercial interest rates but would be guaranteed by the government.

Bankers who signed the agreement yesterday said that the loan would be insured by two state-owned insurance companies, PT Asuransi Kredit Ekspor Indonesia and PT Asuransi Ekspor Indonesia.

He said exporters who benefited from the loan facilities would be requested to deposit their dollar earnings at domestic banks to provide the country with more foreign currency in the country.

Minister of Trade and Industry Rahardi Ramelan, who witnessed the agreement yesterday, said the government would set the criteria for exporters eligible to obtain the loan.

But the government will give priority to garment exporters as they have to follow the fashion seasons and are thus under much more pressure to export their products now, he said.

"There are so many companies which depend on the seasons like fashion and garment companies," he said.

The government also said yesterday that the government would also provide special loans to revive the country's ailing distribution system.

"A memorandum of understanding in an effort to revive the activities of the distribution sector is underway," the statement said.

Banking sources said that, unlike the loans for exporters, the loans to distributors would be offered at an interest rate of 28.8 percent per year, much lower than Bank Indonesia's one-month benchmark time-deposit rate of 56 percent per annum. (aly)