Jakarta — The legislature has endorsed the government’s plan to inject IDR 2 trillion in capital into Perum Jamkrindo and PT Asuransi Kredit Indonesia (Askrindo) to strengthen their financial bases for guaranteeing small business loans (KUR).
Nurdin Tampubolon, Vice Chairman of Commission VI, made the remarks at the MPR/DPR Building in Senayan on Monday (May 31, 2010). “For us, it isn’t an issue—as long as they continue to offer guarantees, the benefits will ultimately accrue to the state,” he said.
He noted that although the capital infusion had yet to be implemented, the move to boost the capital of these insurance companies is part of a broader strategy to enhance the performance of all state-owned insurers and open up larger business opportunities.
Since the KUR program was launched in late 2007 through the end of March 2010, Askrindo has guaranteed roughly 75 percent of the total KUR loans disbursed by banks. As Askrindo’s President Director, Chairul Bachri, explained, out of the total KUR loans amounting to IDR 18.63 trillion, guarantees for IDR 13.3 trillion have been issued by the company.
“With that level of guarantee, the gearing ratio has climbed to 12 times, exceeding the maximum limit of 10 times,” Bachri said. He attributed this situation to the company’s inability to restrict banks’ requests for guarantees.
“We therefore expect that any additional state equity participation to support the KUR guarantee program will be calibrated based on the volume of loans already guaranteed,” he added.
In contrast, Perum Jamkrindo does not view a government capital injection as an urgent necessity. By the first quarter of 2010, Jamkrindo had guaranteed KUR loans totaling IDR 4.6 trillion, maintaining a gearing ratio of 5.41 times.
“Regardless of the exact amount, what matters is that our capital base is strengthened,” said Nahid Hudaya, President Director of Jamkrindo.
Source: detikFinance.com