"We will prioritize micro-, small-, and medium-scale enterprises (UMKM) in the sectors," Himbara Chairman Sunarso stated after a coordination meeting with the Financial Service Authority (OJK) here on Wednesday.
Sunarso, concurrently president director of state-owned Bank Rakyat Indonesia (BRI), remarked that the funding recipients -- BRI, Bank Mandiri, Bank Negara Indonesia (BNI), and Bank Tabungan Negara (BTN) -- will shoulder the task of disbursing loans to boost the country's economic growth.
Sunarso was optimistic that Himbara would triple the extended loans to Rp90 trillion (US$6.32 billion).
"We are ready to leverage the government's funding," he affirmed.
The government, in accordance with Finance Minister’s Regulation No. 70 of 2020, has placed Rp30 trillion in state-owned banks to be channeled as loans to businesses to help support economic recovery amid the COVID-19 pandemic.
Finance Minister Sri Mulyani Indrawati noted that the funding will be placed in deposit accounts for a maximum period of six months, with interest rates of 80 percent of the central bank’s benchmark interest rate of 4.25 percent.
The first batch of the funding placement is projected to encourage economic recovery in the third and fourth quarters of 2020 in the midst of the COVID-19 pandemic.
Indrawati was upbeat about the government later also placing its funds in healthy privately owned banks if the first placement proved to be successful.
The Cooperatives and SMEs Ministry had reported in late April that small businesses had registered a 57-percent decline in sales since the COVID-19 pandemic hit Indonesia.
The ministry cited that small businesses constituted some 60 percent of the country’s gross domestic product.