GOVT SEEKING TO INCREASE CREDITS TO REAL SECTOR

Jakarta, Feb 16 (ANTARA) - The Indonesian government is seeking to increase distribution of credits to the real sector to meet its industrial growth target.

"Bank credits to the real sector are too low and therefore we are trying to boost them to reach 20 percent," Industry Minister MS Hidayat said after a coordination meeting on economic affairs here on Tuesday.

He said the target of credit hike was higher than in 2009 which was at 13 percent in line with the interest rate that had dropped to 11 to 12 percent from above 16 percent before.

"I have already talked with banking community that a nine percent interest will still be difficult to achieve in view of the cost structure like deposit interest which is still high and so 11 percent is the most realistic," he said.

Hidayat said the high lending rate remained a hurdle for industries and with increased distribution of credits he hoped industrial growth could reach 4.6 percent.

"We cannot as yet achieve five percent because our industry is moving backward and the year before it even grew just 1.7 percent," he said.

He said the problems of industrial development were not only internal but also involving other factors as well such as banking and economic cost.

In view of that he said his office would conduct further meeting next week with bankers including the central bank to discuss the issue.

"We will ask for support from the central bank and banking community," he said.