|
Bank Indonesia (BI), the country's central bank, is set to
issue a directive providing a legal basis for the country's banks to
accept warehouse receipts as collateral, Trade Minister Mari Elka
Pangestu said Tuesday in Jakarta.
"For a warehouse receipt to be used as collateral, there needs to be an
intermediary bank.
"BI is preparing a directive so that warehouse receipts can be legally
accepted as collateral," the minister told reporters, saying that with
the issuance of the directive, it was expected that banks would no
longer be reluctant to extend loans based on the surrendering of
warehouse receipts.
A warehouse receipt is a document that evidences the delivery of a
commodity into the custody of a warehouseman, and can be traded or used
as collateral.
Warehouse receipts are widely used as collateral in developed
countries, such as in the United States and Canada, and also in many
developing countries, including India, the Philippines, Ukraine, Brazil
and Zambia.
The government will permit the use of warehouse receipts as both
collateral and as negotiable instruments from July 14. The move follows
one year of preparation, including the introduction of the concept to
all involved -- civil servants, business players and the banks.
Indonesian Commodities Exchange Agency (Bapebti) chairperson Titi
Hendrawati added that initially BI wanted to wait until the full
implementation of the system, but then agreed to a government request
that the directive be issued prior to that.
Titi also said that she had met with the representatives of several
domestic and foreign-owned banks that were interested in extending
loans based upon the pledging of warehouse receipts as collateral.
"We have met with the representatives of foreign banks, such as HSBC
and Rabo Bank. As for the local banks, they are actively involved in
the introduction of the new system. They include Century Bank, Bank
Rakyat Indonesia and Bank Pembangunan Daerah," Titi said.
The government sees the warehouse-receipt system as providing a new
form of financial instrument that will give small and medium business
players, including farmers, access to alternative sources of financing
so that they can free themselves from dependency on loan sharks.
"Considering that Indonesia has abundant natural resources, we are
convinced that this warehouse-receipt system can be used as a means of
helping bring about sustainable development in our commodities sector,"
she said.
In general, the system involves two parties -- the depositor and the
warehouseman. The depositor may be a producer, farmers' association,
trader, exporter, processor or an individual. Meanwhile, the
warehouseman in essence manages the collateral.
For a transaction, the system involves a third party, which can be an
insurance company, a guarantor, a commodity-clearance company or a
bank, to issue a warranty guaranteeing the quality and the quantity of
the stored produce.
This warranty is then used in order to secure a loan from a finance
company or a bank, with the maximum value of the loan to be determined
by the lender and the receiptholder.
In 2006, the Trade Ministry assisted with a pilot project for the
acceptance of warehouse receipts as collateral in Majalengka, Kuningan,
Indramayu and Subang, all in Java. The ministry plans to conduct five
more pilot projects in Java and outside Java this year.
|
