Military Uniform Supplier Sritex Gets $400m Loan From Islamic Bank
Textile manufacturer Sri Rejeki Isman has taken out a $400 million loan, tapping into $3.3 billion in funds that the Islamic Development Bank is making available to Indonesian companies.
Last May, the Saudi Arabia-based IDB announced that it would make the loans available to companies in Indonesia, both private and public.
“We want to see more private projects tap into the loan. The loans will be available until 2014 and 2015,’’ Armida Alisjahbana, the state minister of national planning and development, said on Tuesday.
The Solo-based company, known as Sritex, is the first private company to take advantage of the loans. It produces military uniforms.
Armida said the IDB, a development financing body, was helping the country develop its Islamic financing industry, through actions including educating companies on the benefits of working with Shariah-compliant financing.
Shariah — Islamic law — bans the payment and receipt of interest and forbids investment in tobacco, alcohol and gambling. About 85 percent of the nation’s 240 million people are Muslims.
Indonesia has 11 Islamic banks including Bank Syariah Mandiri, Bank Muamalat, BRI Syariah. Total assets of those three lenders rose to Rp 133 trillion ($14.4 billion) as of December, according to data from Bank Indonesia.
Armida said her office would boost cooperation with the central bank and the Finance Ministry to improve Islamic financing in Indonesia.
“This Shariah-compliant business road map is needed given the size of the country’s population. Definitely, we will design this business road map to develop Islamic finance in Indonesia,’’ Armida said.
Some 35 percent of the IDB’s funding to Indonesia is earmarked for the private sector, including small- to mid-sized businesses, followed by infrastructure at 26 percent, education and human resources at 20 percent and the rest for agriculture and rural development.