JAKARTA (TheInsiderStories) – The country’ export financing agency, Indonesia Eximbank get capital injections Rp5 trillion (US$354.91 million) to help the lender to overcome the non-performing loans (NPL) and boost the lending. By the end of this year, the state firm estimating the NPL reached 23.3 percent or worth Rp21.70 trillion.
President director of the bank, Daniel James Rompas, told the parliament on Thursday (11/19), the company was trying to reduce this NPL level in the next few years. The company targets this ratio lowering to 7.3 by 2024. This improvement in NPL will be followed by an increase in the company’ reserve ratio, which at the end of this year is estimated to only reach 49 percent.
In the next four years, he expected the coverage ratio will be more than 200 percent. As for Oct. 31, Indonesia Eximbank has provided financing of Rp92.36 trillion. The largest exposure was given to the industrial sector with a value of Rp43.46 trillion or 47 percent of the total financing. Then, the agricultural sector, forestry and agricultural worth of Rp17.99 trillion (20 percent), and the mining sector Rp7.61 trillion (8 percent of this year’ total financing).
The ministry of finance has announced there was an additional distribution of state capital injections for three state-owned enterprises (SOEs) and financing institutions amounting to Rp8.57 trillion in the 2020 State Budget. In detail, Rp5 trillion fo Indonesia Eximbank, PT Penjaminan Infrastruktur Indonesia Rp1.57 trillion, and PT Bio Farma of Rp2 trillion.
In September of 2020, Indonesia Eximbank received funding with a total value of $580 million from China Eximbank and PT Bank ICBC Indonesia. Loan facility from China Eximbank worth of $200 million with a three-years tenure and Bank ICBC of $380 million also have period three and five years.
Rompas said that 50 percent of the loans will be used to support exporters’ working capital financing needs with a priority on the facilitate trade, investment and infrastructure between Indonesia and China. As the government armed, the lender provide national export financing for business entities, including individuals domiciled in and outside of Indonesia.
The Indonesia Eximbank‘ initial capital is set at at least Rp4 trillion that separated and not divided into shares. Recently, the government through the lender and Infrastructure Guarantee Fund has providing support for corporations involved in labor-intensive projects in the form of working capital loans.
The working capital credit guarantee scheme will be given to credit with a ceiling of Rp10 Billion to Rp1 Trillion and is targeted to create Rp100 trillion working capital Credit until 2021. According to senior economic minister, Airlangga Hartarto, the corporate guarantee in the framework of National Economic Recovery Program.
Indonesia Eximbank is regulated by Law Number 2 of 2009, which establishes the role of entity policy, legal status, supervision, dividend policy, and options for capital injection. This means that the bank is not subject to the state bankruptcy law, and can only be dissolved by the Special Parliamentary Act.
The lender is 100 percent owned by the government whose capital is not divided into shares.
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