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Indonesian Eximbank agrees to guarantee Permata’s export loans
Under the agreement signed in Jakarta on Friday, Indonesia Eximbank will, in the initial stage, guarantee 50 percent of Permata Bank’s loans
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Containers of export goods wait for shipment at Tanjung Priok Port in North Jakarta. Indonesia Eximbank agreed Friday to provide a guarantee for Permata Bank's export loans. (Antara/Muhammad Adimaja)
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ndonesia Eximbank has agreed to provide a guarantee for export credits provided by Permata Bank, as part of its program to boost financing for export-oriented companies.
Under the agreement signed in Jakarta on Friday, Indonesia Eximbank, also known as the Indonesian Export Financing Institution (LPEI), will, in the initial stage, guarantee 50 percent of Permata Bank’s loans allocated to export-oriented companies.
Sinthya Roesly, the president of Indonesia Eximbank, said the agreement to partly guarantee Permata’s export credit was part of Indonesia Eximbank’s mission to provide financial support for the country’s export-oriented companies. In addition to the loan guarantee, the government-owned financing agency also has the task of providing export credit.
“We were given a mandate by the government to provide export loans provided by local banks to local companies,” Sinthya said during the signing of the cooperation agreement.
Under Law No.2/2009 on export financing, Indonesia Eximbank has the duty to guarantee other banks’ loans that are given specifically to Indonesian export-orientated companies. However, banks that want to receive a guarantee from Indonesia Eximbank must fulfill a number of requirements such as having a risk-weighted asset ratio of 0 percent and holding liquid collateral from its borrowers.
Banks must also omit their legal lending limit (BMPK) for loans given to exporting companies for as long as they are guaranteed by Indonesia Eximbank.
“We welcome other banks to join a similar agreement in the future. Obviously, the prospective banks must fulfill the requirements set by us to minimize default risks,” Sinthya told The Jakarta Post.
