Japan bank looks to expand SME lending

Aditya Suharmoko ,  The Jakarta Post ,  Jakarta   |  Tue, 02/12/2008 11:15 AM  |  Business

Bank of Tokyo-Mitsubishi UFJ, which with a partner recently acquired a local bank, is expected to prioritize lending to small and medium enterprises (SMEs), a minister says.

"I've asked Bank of Tokyo officials to prioritize the bank's lending to local businesspeople operating SMEs," Coordinating Minister for the Economy Boediono said here Monday after meeting with bank officials.

The bank officials were led in the meeting by president and chief executive officer Nobuo Kuroyanagi.

Last December, Bank of Tokyo, along with Japan-based financial services company Acom Co., acquired a 75.41 percent share of Bank Nusantara Parahyangan, which is headquartered in Bandung, West Java.

Acom owns 55.41 percent of Bank Nusantara shares, while Bank of Tokyo owns 20 percent.

Bank Nusantara commercial and operational director Nani Wirianti Sugata said the acquisition was expected to boost the bank's performance in terms of lending, particularly to SMEs.

In 2007, most of the bank's loans went to SMEs, making up around 66.36 percent of total loans, said Sugata.

Bank Nusantara, listed on the Indonesian Stock Exchange, has a total capital of more than Rp 300 billion (about US$32.45 million).

Boediono said that judging by the acquisition, Bank of Tokyo was interested in expanding its business in Indonesia.

"The bank seems optimistic about business here and the country's economy. For us, the bank is crucial in attracting Japanese investors," he said.

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