BANK MANDIRI RAISES LENDING RATE BY 0.75 PCT

Jakarta, Sept 11 (ANTARA) - Bank Mandiri, Indonesia's largest state lender, has raised its lending rate by 0.75 percent due to a rise in its cost of funds.

"The lending rate rose 0.75 percent. The benchmark interest rate or BI Rate has several times been raised. And we raised our lending rate only this week," the bank's micro and retail director, Budi G Sadikin, said here on Thursday.

The BI Rate currently stands at 9.25 percent. Bank Indonesia (the central bank/BI) has raised the key rate for the fifth month in a row since May 2008.
Consequently, annual retail and micro interest rates would increase to 12-18.75 percent. "Earlier, the monthly rate was 1-1.5 percent," he said.
He said the amount of micro small and medium business credits channled by the bank in the first half of 2008 stood at around Rp20 trillion.
Since early this year, the bank had channeled credits worth around Rp250 billion to farmers in support of the country's food security program, he said.
The bank has set itself the target of channelling such credits worth Rp400 billion this year.
"The loans for the country's food security program carry 12 percent interest," he said.