"More than 50 percent of bank funds are short term funds in one-month deposits," Assistant Governor of Bank Indonesia Hendar said addressing a meeting on infrastructure here on Friday.
Hendar said so far investment credits have not been more than 20 percent of bank credits .
"This shows the problem is in financing with long term funds not sufficiently available," he said.
Based on data from the National Development Planning Board (Bappenas) around US$214 billion are needed for investment in infrastructure for the period of 2010-2014.
However, the government could provide only 65.4 percent or US$140 billion for infrastructure development budget, or a gap of 34.6 percent or US%74 billion, he said.
The funding gap is expected to be covered by the private sector through the mechanisms of public private partnerships (PPP), a government and private sector cooperation scheme, however, the scheme did not work as banks are reluctant to finance infrastructure projects, which are generally multi-year projects.
"Therefore, we are thinking about how to expand financial market especially in the role of the central bank in financing the economy," Hendar said.
(H-ASG/F001)
Editor: Jafar M Sidik
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