"We have talked about the plan with Riau Islands Sharia Bank. God willing, this year, it can be realized," he informed in Tanjungpinang, Riau Islands, on Saturday.
He said that the contract between the bank and the Riau Islands government on zero percent interest credit will be in effect for two years. If the program benefits enterprises, the collaboration will be extended by another two years.
The program seeks to allow MSMEs to improve their productivity and expand their marketing reach. In turn, their productivity is also expected to positively impact the job market and boost public welfare.
"There is so much derivative benefits of this program after the MSMEs receive stimulus in the form of interest-free loans; hence, we increase the amount of loans," he explained.
Head of the Riau Islands Cooperatives and Small and Medium Enterprises Office, Agusnawarman, said that his administration and the Riau Islands Sharia Bank had inked a cooperation contract for extending the term of the zero interest loan program.
"The amount of loan will be increased this year so that MSMEs can gain the most out of it," he added.
The recipients will get two years to pay back the loan, he informed. So far, the loan repayment has gone accordingly, he said. "There are no complaints from the bank," he added.
The program was one of the provincial government's best programs, he said. Moreover, some places in Riau Islands province have adopted similar programs to boost MSME productivity.
"Siak, Meranti, and Pelalawan governments take after our program," he said.
There are 113 thousand MSMEs in Riau Islands, he pointed out. Of that figure, only 755 businesses have joined the zero percent interest loan program, Agusnawarman noted.
"From November 2021 to December 2022, there were 755 MSMEs who registered for this program, with a total loan value of around Rp14.2 billion (US$935 thousand). Bank interest subsidized by the Riau Islands provincial government only capped at Rp1.3 billion (US$85.6 thousand)," he said.
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Translator: Nikolas Panama, Mecca Yumna
Editor: Azis Kurmala
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