Mandiri to expand lending to SMEs

Mandiri to expand lending to SMEs

Despite reports of possible bad loans, state-owned Bank Mandiri,
the nation's richest bank, is planning to channel some Rp 4.5
trillion (US$478 million) to micro and small businesses this
year, from Rp 1.2 trillion last year.

Mandiri director for small and medium businesses Sasmita said
on Monday that the expansion was aimed at strengthening the
bank's position in the sector, as well as helping revive the real
economy.

"Mandiri formed a special division last year that will deal
with small businesses and micro banking. The division will
cooperate with micro banks located throughout the country to help
channel the loans," Sasmita said.

At present, the bank's outstanding loans to micro, small and
medium businesses stand at some Rp 32 trillion; accounting for
about 34 percent of the bank's total lending portfolio, which
reaches more than Rp 95 trillion.

Sasmita said the bank had projected outstanding loans for its
micro, small and medium businesses to reach about Rp 125 trillion
by 2010. Bank Mandiri's policy sets loans of below Rp 100 million
for micro businesses, between Rp 100 million and Rp 2 billion for
small businesses, Rp 2 billion and 5 billion for commercial, and
above Rp 5 billion for medium businesses. -- JP