[Nasional-e] Jakarta pawnshop sees loans hitting $1 billion mark

[Holy Uncle]

http://www.dailytimes.com.pk/default.asp?page=story_6-2-2003_pg5_19

Jakarta pawnshop sees loans hitting $1 billion mark

JAKARTA: Indonesia¡¦s biggest pawnshop, Perum Pegadaian, said on Wednesday 
it expects new loans to rise 15 percent to $1 billion this year, on a par 
with the country¡¦s biggest banks.

The state-run firm, a favourite on the local corporate bond market, also 
said it might postpone a debt issue thanks to loans from the government.

Helping it meet the ambitious loan growth target is a network of 745 
branches across the sprawling country of 210 million people. The company has 
17 million customers, twice that of the country¡¦s biggest retail lender, 
Bank Central Asia They range from students needing less than $2 and offering 
a small radio as collateral, to building contractors with a Mercedes Benz as 
security.

Dedy Kusdedi, president director of state-run Pegadaian, told Reuters in an 
interview on Wednesday the firm had recently secured 1.5 trillion rupiah 
($169 million) in soft loans from the government. The deal should help it 
achieve its loan target and ease the need to issue bonds for loan financing.

¡§We might postpone an earlier plan to issue 400 billion rupiah bonds this 
year after securing the soft loans which are expected to be disbursed by 
May,¡¨ Kusdedi said. Indonesia¡¦s main credit rating agency, PT Pefindo, has 
given Pegadaian¡¦s bonds an idAA- rating ¡X which implies a very strong 
capacity to meet long-term financial commitments ¡X surpassing a rating for 
the bonds of the country¡¦s biggest cement firm, Semen Gresik.

As well as the soft loans, the firm says internal funding and bank loans 
would help finance its 2003 loans.

Opportunities: Kusdedi said the soft loans should further strengthen the 
pawnshop¡¦s ability to capitalise on a growing market for small loans, which 
the central bank defines as those below 500 million rupiah.

¡§The soft loans will be channelled to small firms to strengthen working 
capital and for business expansion,¡¨ Kusdedi said, adding the loans could 
for as little as one million rupiah or less. ¡XReuters





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