Mandiri provides loans to spur labor exports

Mandiri provides loans to spur labor exports

Ridwan Max Sijabat, The Jakarta Post/Jakarta

People wanting to work overseas may now not have to sell
treasured assets or borrow from loan sharks at outrageous rates
after the signing of a deal allowing Bank Mandiri to help finance
their recruitment and departure abroad.

The bank's director for small business and micro-banking,
Sasmita, said Mandiri would allocate Rp 100 billion (US$10
million) in the initial phase to finance labor exports in the
last quarter of this fiscal year.

"The funds will be used to cover the recruitment and departure
fees of workers, who will work in Hong Kong and Taiwan. In its
implementation, Mandiri will channel the funds through labor
exporters with an annual interest of 17 percent," Sasmita said,
following the signing of a memorandum of understanding with the
Manpower and Transmigration Ministry on Friday.

Migrant workers in Hong Kong, Singapore, Malaysia and the
Middle East would also find it easier to bank through Mandiri's
overseas branches and partner banks in those areas, he said.

Mandiri has long been interested in the labor export sector,
with migrant workers repatriating around Rp 1.5 trillion annually
to their relatives through the bank, he said.

Mandiri is the third lender here which has committed to
expanding its business in the labor export sector. The two others
are Bank BNI'46 and Bank Chinatrust Indonesia.

Husein Alaidrus, chairman of the Indonesian Labor Supplying
Companies Association (Apjati), said the participation of banks
in the labor export market would benefit workers and labor
exporters.

"The banks' participation in (this sector) has encouraged
labor exporters to recruit more and more skilled and semi-skilled
workers to work overseas," he said.

While the largest percentage of Indonesian migrant workers
overseas were still house maids, this was because most labor
exporters had been running short of funds to train workers, he
said.

"If Indonesia can send semi-skilled and skilled workers,
instead of housemaids, its remittance from the sector will
double." Semi-skilled and skilled workers were paid between $400
and $1,200 monthly while unskilled workers were paid around $150
a month, he said.

Sending in skilled workers abroad would also raise Indonesia's
foreign exchange from labor exports to around $10 billion
annually in the near future from the current $4 billion.

Around 70 percent of some two million Indonesian migrant
workers overseas are unskilled.

Halomoan Hutapea of the Legal Aid Foundation for Migrant
Workers said the three banks should provide lower interest loan
to help empower workers from poor economic backgrounds in rural
areas.

"If the banks' rates of interest can be lowered, more workers
would be expected to seek financial assistance.

"Many workers and their relatives have sold their land or
other potential assets to finance their departure overseas, or
taken a loan from brokers with irrational rates of interest."

Sasmita said the implementation of the agreement would help
boost the bank's micro loans, which currently stand at Rp 1.5
trillion. (006)