Hopefully in the second semester of this year, the interest rate of the bank would be below 10 percent in all sectors," Corporate Secretary of Bank Mandiri Rohan Hafas said.
Jakarta (ANTARA News) - State-owned lender Bank Mandiri said it would cut its lending rate by 25 - 50 basis points to follow the central bank reducing its benchmark interest rate (BI rate) and to help boost the countrys economic growth.

Bank Indonesia has cut its BI rate three times this year from 7.5 percent to 6.75 percent earlier this month.

Corporate Secretary of Bank Mandiri, the countrys largest bank, Rohan Hafas, said the bank would take steps toward adopting low interest policy .

With low interest rates, the bank hopes to improve its intermediacy function.

"The cut in lending rate by 25-50 basis points would be made by taking into account the most ideal sectors for which the interest rate would be cut. Hopefully in the second semester of this year, the interest rate of the bank would be below 10 percent in all sectors," Rohan said on Sunday.

Rohan said the performance of the bank would not be affected with the adoption of low interest policy as the bank also is expected to gain more source of cheap funds.

Currently the bank already adopted single digit interest policy by funneling more credits to small and medium enterprises (UMKM) with lending rate of only 9 percent a year, he said.

This year Bank Mandiri will funnel up to Rp13 trillion in Peoples Business Credit (KUR), up from last years allocation of Rp3.5 trillion.

By the end of last year, the bank recorded Rp595.5 trillion in outstanding credit, up 12.4 percent from Rp530 trillion a year earlier.

The bank continues to boost financing for productive sectors which accounted for the bulk or Rp463.8 trillion of the total outstanding credits or 13 percent higher than a year earlier.

Its investment credits grew 14.2 percent, working capital credits rose 12.3 percent,credits for infrastructure sector grew 4.2 percent and for the manufacturing sector rose 21.7 percent.

Increase was recorded in credits in almost all sectors with the highest for micro businesses rising 22.9 percent to Rp42.5 trillion by he end of 2015.

The receivers of micro credits also increased in number to 1,108,992 clients and credits funneled to UMKMs grew 3.2 percent to Rp75.8 trillion by the end of 2015.

Meanwhile, third party fund (DPK) held by the bank totaled Rp676.4 trillion by the end of 2015 consisting of cheap funds including giro and savings accounting for Rp443.9 trillion of the total. Savings alone shot up Rp19.3 trillion to Rp271.7 trillion.

"We hope that the step we are taking would be followed by other banks in Indonesia, that we would together help boosdt the countrys economic growth," Rohan said.

Earlier, another state lender Bank Negara Indonesia (BNI) said it would lower its lending rate on UMKM credits in April.

"We will cut the lending rate to less than 10 percent for Rp5 billion UMKM credits the bank plans to funnel in April," said Ahmad Baiquni, the president director of the countrys fourth largest bank in assets.

Baiquni said that the the Deposit Insurance Institute (LPS) is expected to also cut the market deposit rate to follow the central bank lead.(*)

Editor: Heru Purwanto
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