Bank Mandiri to extend Rp1 trillion in credits to sugarcane industries

Jakarta (ANTARA News) - Bank Mandiri, the country`s largest lender by assets, will provide Rp1 trillion in credits for sugarcane-based industries this year, a bank official said.

"We have set ourselves the target of providing Rp1 trillion in credits for industries with sugarcane-based products this year," Sunarso, Bank Mandiri`s plantation specialists group head, said at a seminar on the prospects and financing of sugarcane-based industries here Tuesday.

He said though his bank had made the commitment to extend Rp1 trillion in credits, it would depand on the ability of the industries concerned to absorb the funds because it was still difficult to allocate credits to this sector.

Sunarso said Bank Mandiri had up to April 2007 extended credits worth Rp520 billion to industries with sugarcane-based products, including those turning out down-steam products.

"Bank Mandiri is fully committed to carrying out its intermediary role in the plantation sector. Of our plantation portfolio, sugarcane industries and trade in their down stream products account for 2.4 percent of the market share, or about Rp540 billion," he said.

In the farming sector, the amount of credits provided up to April 2007 reached Rp13.8 trillion, while in the plantation and trade sectors the figure was Rp8.1 trillion, Sunarso said.

In the meantime, Bank Indonesia (BI) on the occasion called on banks to increase their credits for sugarcane-based industries.

"Banks` role in providing credits for sugarcane-based industries has remained small because the industries have not shown their real potentials," BI Deputy Governor Muliaman D. Hadad said.

He said there were actually a lot of banks which had provided credits for sugar industries. This was because the industries` non-performing loan level was low and they had good prospects not only in sugar production but also in the making of down-stream products such as ethanol.

Muliaman said BI had recorded that a total of 32 banks had financed projects in this sector with credits totaling Rp1.6 trillion