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New RI Exim agency may 'save the day'
Businesses have placed high hopes on the new export financing agency (LPEI) to be set up shortly, following the recent endorsement of the LPEI bill, saying now is the right time for the country to have this new institution to help cope with the global credit and financing crisis
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Businesses have placed high hopes on the new export financing agency (LPEI) to be set up shortly, following the recent endorsement of the LPEI bill, saying now is the right time for the country to have this new institution to help cope with the global credit and financing crisis.
Benny Soetrisno, chairman of the Indonesia Textile Association (API), said Friday textile producers welcomed the endorsement of the bill which paved the way for the setting up of the agency.
"It's very good to have LPEI, which will provide a financing scheme different to that of (most) banks because banks don't disburse loans to new business players," he said in a conference.
"Unlike LPEI, banks require a business asking for loans to have earned profits for two years in a row," he added.
Likewise, Indonesian Employers Association (Apindo) chairman Sofjan Wanandi, also at the conference, said he believed the new law would support exports.
"LPEI's requirements for loan proposals should not be as tough as commercial banks lay down, including collateral requirements, etc.," he said.
Trade Minister Mari Elka Pangestu said LPEI would emerge as a new institution replacing Indonesia Export Bank (BEI).
"BEI will have a six month transition period to transform itself into LPEI, which we have all been awaiting for so long," she told reporters at the Trade Ministry.
"LPEI will be useful for exporters to penetrate, particularly, new non-traditional export markets, (complementing) the financing schemes provided by commercial banks," she said.
Earlier this week, a House of Representatives plenary session endorsed the bill, providing the legal basis for the establishment of the agency, which will be named the Indonesian Eximbank.
The agency is expected to start operating by June next year.
The law mandates the agency to help exporters facing the global economic turbulence by providing a new alternative financing, underwriting and insurance scheme, despite the drying up of liquidity in many financial institutions.
Finance Minister Sri Mulyani Indrawati earlier said the government would inject Rp 4 trillion (US$358.74 million) of initial capital into the agency, with it expected to "have total assets of Rp 14 trillion" before starting operations.
The agency will be allowed to secure funds from government bonds and foreign borrowings, while putting its reserve funds in government bonds, central bank certificates and foreign currencies.
