Subsidized loans soar

JAKARTA (JP): The value of liquidity credits, or subsidized loans, provided by Bank Indonesia increased 21 percent in the three months to June: From Rp 9.21 trillion in March to Rp 11.27 trillion (US$4.77 billion) in June.

Bank Indonesia Governor J. Soedradjad Djiwandono said Wednesday the growth rate of subsidized loans was much higher than the 13.1 percent growth recorded in the same period last year.

The central bank governor attributed the sharp increase in the subsidized loans to its support for the National Logistics Agency's (Bulog) buffer stock program.

Soedradjad said the liquidity credits for Bulog alone increased by 65 percent to Rp 4.74 trillion in June from Rp 3.05 trillion in March.

The liquidity credits, which have an annual interest rate of 14 percent, are awarded to help cooperatives finance government- sponsored projects such as the rice intensification program and clove and fertilizer procurement. The low-interest credits are also awarded to Bulog for its buffer stocking program. (hen)