Switzerland to provide $100m in loans

The Swiss government signed on Monday a Memorandum of Understanding with its Indonesian counterpart to facilitate access to credit for small and medium enterprises in the country.

Swiss Minister of Economic Affairs Joseph Deiss told a press conference that a credit line of up to US$100 million would be channeled to five local banks.

The project dubbed Access to Finance for SMEs in Indonesia would be a joint cooperation between Bank Indonesia, the World Bank's financial arm the International Finance Corporation (IFC) and non-governmental organization Swisscontact, the minister said.

"The credit line will include a special incentive scheme for lending to SMEs in the tsunami-affected region in northern Sumatra," he said.

He further explained that the credit line was accompanied by a technical package and incentive schemes to encourage the banks to grant loans to SMEs in tsunami-stricken areas.

The technical assistance and incentive is valued at approximately $8 million to $10 million.

Deiss explained that Swisscontact would be helping the SMEs to qualify for getting the loans and on the other side the NGO would assist local banks in managing this type of lending. -- JP