THIRTEEN BPDs AGREE TO RAISE LENDING RATE

Jakarta, Feb 27 (ANTARA) - Thirteen regional government-owned banks (BPDs) have raised their lending rates by 1 percent after being appointed smallholder business credit (KUR) extension agents.

"Some of the BPDs had been charging an interest of 13 percent or a lower rate than that on KURs. But now, with the general one-percent increase, there is no more problem," Chief of the Regional Development Banks Association (Asbanda) Winny Erwindia Hasan said here on Saturday.

Under the agreement, the 13 banks would charge interest rates equal to that on KURs, she said.

In principle, the difference between the two interest rates would not significantly affect the banks, she said.

"The difference is not too much. It is only 1 percent. I think it is not too significant except it reaches more than 3 percent," she said.

The slight difference between the two interest rates would not affect the number of KUR applicants, the more so because the banks had agreed to adjust their lending rates to the KURs', she said.

The 13 banks are expected to channel Rp3.3 trillion to Rp3.5 trillion in KURs this year. The government has set the target of KURs channeled this year at Rp20 trillion.

She said she was optimistic the target could be achieved.

"We are quite experienced in channeling credits to SMEs, the more so because this time we will focus our attention on the micro sector," she said.

Winny who is also the president director of Bank DKI Jakarta said the bank had set itself the target of extending an estimated Rp200 billion in KURs this year.