Indonesian government assigned the largest small and medium enterprises lender, PT Bank Rakyat Indonesia (IDX: BBRI), to disburse Rp122.5 trillion (US$8.68 billion) worth of loans over the next six months, said finance minister today (06/29) - Photo by President Office

JAKARTA (TheInsiderStories) – Indonesian government assigned the largest small and medium enterprises lender, PT Bank Rakyat Indonesia (IDX: BBRI), to disburse Rp122.5 trillion (US$8.68 billion) worth of loans over the next three months, said finance minister today (06/29). The assignment part of an effort to implement a national economic recovery (ERP) program.

While, PT Bank Mandiri Tbk (IDX: BMRI) will distribute funds to productive, labor-intensive, food security and national logistics systems with a total up to Rp21 trillion until September. Then, PT Bank Negara Indonesia Tbk (IDX: BBNI) will carry out credit expansion in the real sector for corporations, medium and small businesses, and consumer loans with worth Rp15.04 trillion.

And, PT Bank Tabungan Negara Tbk (IDX: BBTN) plans to give loans until December 2020 worth Rp30.03 trillion, which is dominated for mortgages and other loans in the housing sectors. She hopes, the state banks could triple the the funds in short period.

Last May, President Joko Widodo has signed a special rule  Government Regulation Number 23 of 2020 regarding ERP. The regulation written that the government can carry out capital injection to state-owned enterprises (SOEs), placement of funds, government investment, and guarantees for the program. The program can also be implemented through state expenditure.

In policy making, the coordinating minister for the economic affairs, the coordinating minister for maritime and investment affairs, the minister of finance, the governor of Bank Indonesia, chairman of the Financial Service Agency and Deposit Insurance Agency will determined the implementation strategy of the ERP, including in setting priorities in the business sectors affected by the epidemic.

in Article 8, its written that the capital injection is given in order to improve the capital structure of SOEs and subsidiaries affected by COVID-19. The funds can also be given to increase the business capacity of SOEs and subsidiaries, including to carry out special assignments in the implementation of the ERP Program.

Last week, the government decided to places  Rp30 trillion of funds with coupon rates 3.42 percent in the state-owned banks. The allocated funds come from the government funds in the central bank.

According to Law Number 2/2020 concerning on State Financial Policy and Financial System Stability for Handling the COVID-19 and finance ministerial decree Number 70/2020 regarding the placement of state money in commercial banks, minister of finance will forge the government fund to the state-owned banks in the context of accelerating economic recovery.

Indrawati admitted has written a letter to BI to move the state funds in central bank to the national banking sector to recover the real sector. She added, the banks not allowed to use the placement funds to buy state bond or foreign currency.

“In this context we will make a cooperation agreement with the CEO of the state banks association. The coupon rate 80 percent of BI-7DRR rate,” she said.

 US$1: Rp14,100

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