Local banks agree to help export-oriented companies

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)