BRI Cuts Lending Rates for SMEs
Jakarta. Bank Rakyat Indonesia, the nation's second-largest lender by assets, will next month lower its lending rates for small and medium enterprises by 300 basis points in a bid to boost lending and in turn propel the economy, the company's executive said in a statement.
The lender set to cut its lending rates for new SME debtors to 9.75 percent from the previous 12.75 percent on average, effective on May 1.
The lower rate would boost loan growth in SME sector to between 10 percent to 13 percent this year from last year, Hari Siaga Amijarso, Bank Rakyat Indonesia corporate secretary, said on Monday (25/04).
BRI estimated SME lending growth at 4 percent to 6 percent the first quarter from the same period a year ago, he said.
"BRI keeps on trying to boost loan distribution to SME sector to stimulate its business growth as it has a potential and strategic role in the economy," Hari said.
Hari also confident that the lender's prudential measures would able to filter out weak SMEs from taking out new loans, maintaining BRI's gross non-performing loan — number of loans go unpaid for at least 90 days — at 2.02 percent of the total loan, same as last year.
Bank Indonesia, the country central bank, require lenders to maintain bad debt lower than 5 percent of their total loans.
BRI follows step of peer Bank Mandiri, the country largest lender by assets, that has cut its lending rates for some corporate, commercial and small and medium business clients by 25 basis points earlier this month.
The government has instructed its lenders to reduce loan interest in order to help the country with achieving 5.6 percent growth this year. Last year, the largest economy in Southeast Asia expanded 4.8 percent, its slowest pace in six years.
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