“Vocabulary”
Written by:
Bahron firmansyah(11.88203.1003)
MADURA UNIVERSITY
A. Article
New Policy Triggers Fiercer Competition in Lending Market
The Jakarta Post, Jakarta | Headlines | Fri, November 30 2012, 10:49 AM
The issuance of new lending regulations by the central bank last week will result in fiercer competition to extend loans to local small and medium enterprises (SMEs), bankers have agreed.
“There will be more banks channeling credit to SMEs next year. From an economic perspective, more supply means more competition,” Djarot Kusumayakti, BRI director’s for micro, small and medium enterprises loan portfolios, said in Jakarta on Thursday.
Bank Indonesia (BI) unveiled a package of regulations last week, including a rule that obliges banks to channel at least 20 percent of their credit portfolio to the SME sector starting next year.
Analysts have said that the policy would trigger more competition in SME lending, which is currently controlled by a few lenders with a wide reach.
In a report released in September, the Organization for Economic Cooperation and Development (OECD) said that Indonesia needed to “inject stronger competition” into its SME segment, which was currently “highly concentrated, with the large banks such as Bank Rakyat Indonesia, holding dominant market positions”.
Bank Panin vice president director Roosniati Salihin acknowledged that the policy would generate fiercer competition, although she remained optimistic that there was still a huge and untapped market in the SME credit segment.
“For banks, the SME credit segment has great potential business. With the nation enjoying a surge in its middle class, there will be more ‘bankable’ citizens in the market,” Roosniati said on Thursday. SME loans currently comprise 40 percent of Bank Panin’s lending portfolio.
In addition, BI would also soon apply its prime lending rate policy (SBDK) to the SME credit segment, obliging banks to publish their interest rates starting in January.
At the moment, the prime lending rate publishing requirement only applies to the retail, corporate and consumer credit segments.
“The purpose [of the prime lending rate] is to push down the interest rate sector in the SME sector,” BI director for economic research and monetary policy Perry Warjiyo told The Jakarta Post on Thursday.
Djarot echoed Perry’s comments, saying that the prime lending rate, coupled with the 20-percent minimum requirement for lending for SMEs, would “definitely” put downward pressure on interest rates for the segment.
“The banks that will be affected the most by this policy are those with higher interest rates,” he said.
BRI is the biggest player in the SME market, which accounted for 52.2 percent of the lender’s total outstanding loans of Rp 318 trillion (US$33 billion) as of September.
Banks usually charge higher interest rates for loans in the SME sector due to the high risk of default as well as due to higher operating costs.
Consequently, banks that focus on SMEs normally have high net interest margins (NIM), which indicates a bank’s profitability. (sat)
B. List of word
No |
Noun |
Verb |
Adjective |
Adverb |
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59
|
New Policy Fiercer Competition Market Headline Issuance Regulation Central Bank Result Loan Small Medium Enterprises Have More Channel Perspective Means Director Portfolios Package Regulation Rule Sector Analysts Reach Organization Report Cooperation Development Strong Segment Positions Vice president Business Nation Surge Class Citizens Addition Prime Interest Requirement Retail Consumer Purpose Research Comment Pressure Trillion Total Charge Costs Sector Risk Default Profit
|
Trigger Lend Will Extend Credit Agree Supply Said Unveil Include Oblige Start Control Release Inject Need Concentrate Hold Direct Acknowledge Generate Remain Enjoy Apply Rate Publish Push Told Echo Say Couple Put Affect Account Play Operate Focus Have Indicate
|
Local Economic Least Few Wide Large Such Which Dominant Optimistic Huge Untapped Potential Middle Corporate Down Monetary Downward Minimum Most Higher Biggest Outstanding Due Margins Net On Well
|
Friday November By Last week Next year Thursday Last week Currently September Highly Still Great Middle January Also Soon Moment Only Definitely As Higher Usually Consequently Normally Jakarta |