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These are Interest Subsidy Schemes for MSMEs and Micro Enterprises in the Middle of Low Economy Due to COVID-19

Jakarta, 29/04/2020 Ministry of Finance - Minister of Finance Sri Mulyani Indrawati explained virtually about the interest subsidy scheme for the business world, especially Micro, Small and Medium Enterprises (MSMEs) to Ultra Micro Enterpreises(MSEs) affected by COVID-19 after the Limited Meeting (Ratas) with President Jokowi in Jakarta on Wednesday (29/04).

"The first 3 months interest facility is paid by the government for 6%, the next 3 months the interest borne by the government is 3%," explained the Minister.

This applies to MSME loans in the Rural Bank (BPR) 1.62 million debtors, banks 20.02 million debtors, finance companies including two-wheeled motorcycle loans  6.76 million debtors in total.

The subsidy also applies to micro lenders under Rp500 million which are considered equivalent to the People's Business Credit (KUR), there are 28.3 million accounts or customers.

"In this case, the government provides interest subsidies," she said.

Then, for the debtors of Rp500 million-Rp10 billion in restructured loans, the government provided the first 3 months of 3% interest assistance, the second three months, 2% interest assistance.

"This is for debtors of Small and Medium Enterprises whose loans are up to Rp500 million and for medium loans whose loans are between Rp500 million and Rp10 billion," he explained.

The Minister continued, banks can provide restructuring with a principal delay of 6 months. Then the debtor can get subsidized interest from the government.

For the People's Business Credit (KUR), which amounts to 8.33 million debtors, the scheme is the same as loans under Rp500 million.

Whereas for Ultra Micro (UMi) whose loans are Rp5-10 million or below, including the Mekaar credit category 6.08 million debtors, UMi 1 million debtors, Pegadaian 10.6 million debtors, will also get an interest subsidy for 6 months of 6%.

The delay in principal installments for KUR, UMi, Mekaar and Pegadaian amounted to Rp105.7 trillion.

The delay in principal installments for Rural Banks, banks and finance companies is estimated to total Rp165.48 trillion.

The second total of the installment delays is Rp271 trillion of the total installments which were postponed for 6 months.

There are estimated to be 1.7 million debtors of cooperation without access to UMi. Agency of Revolving Fund Management (LPDB) 30,000 customers. MSMEs which became online platform merchants of 3.7 million. In the MSMEs in the Local Government, fisherman of 6.29 million will also get a 6% interest subsidy from the government. Total outstanding from this category is Rp16.3 trillion and delays of Rp13.8 trillion.

This program can be carried out because Government Regulation in Lieu of Law No. 1 Year 2020 (Perppu No. 1 of 2020), especially article 11, is intended to maintain the economic capability of business actors through the placement of government funds, guarantees, State Capital Participation (PMN), and investment. (nr/f)