Banks Not to Disburse Loans to Large Entrepreneurs
Thursday, 21 December, 2006 | 14:02 WIB

TEMPO Interactive, Jakarta: Finance Minister Sri Mulyani has asked that banks disburse subsidized plantation loans for farmers, instead of to large companies.

This policy, according to her, is aimed at boosting farmers' participation to cultivate plants producing vegetable-based fuels in order to support the policy of diversifying energy sources.

The amount of loans involved is around Rp25.56 trillion for the next five to seven years.

“Do not only disburse loans to their friends,” said Sri Mulyani yesterday (12/20) at the Department of Finance building in Jakarta when signing a partnership agreement for financing to develop vegetable-based energy and plantation revitalization between the government and five banks: Bank Mandiri, Bank Rakyat Indonesia (BRI), Bank Bukopin, BPD West Sumatra and BPD North Sumatra.

The disbursement of subsidized loans for oil palm, rubber, and cocoa plantations was stipulated in Finance Ministerial Regulation Number 117/PMK.06/2006.

The amount of interest subsidies in 2007 will be around Rp1 trillion.

Bank Mandiri has committed to disburse loans of Rp11.08 trillion; BRI, Rp12 trillion; Bank Bukopin, Rp1 trillion; BPD West Sumatra, Rp0.98 trillion; and BPD North Sumatra, Rp0.50 trillion.

Farmers will only have to pay an interest rate of around 10 percent, while the remainder will be paid by the state.

Sri Mulyani said she hoped that these loan disbursements would trigger farmers to plant three kinds of plants producing vegetable-based fuels to create employment and reduce unemployment.

Budi Riza