Advancing loans to the textile industry involves high risk, yet state lender, Bank Negara Indonesia (BNI) is going to infuse funding in this sector, during 2006.
Textile companies will get enhanced loans of Rp 2 trillion ($211 million) compared to 2005, said BNI President Director Sigit Pramono, after a meeting with Minister of Industry Fahmi Idris on Wednesday.
Fahmi estimates the first phase of revitalization will require up to Rp 5 trillion in new investments.
He met Burhanuddin Abdullah, Governor, Bank Indonesia and officials from local banks to advance financial help for the revival of the textile industry.
Textile companies need finance to replace old machinery.
Textile industry ministry reported that half the machines were more than 15 years old.
Other problems in the industry range from smuggling and increasing energy costs to accusations of damaging environment.
Fahmi said next week, detailed discussions will start with the central bank, local banks and industry players to discuss details of possible loans.
The ministry has targeted a growth of 4.3 percent this year compared to 1.5 percent last year.
