The ministry of finance' government investment center has distributed ultra micro financing of Rp1.2 trillion (US$81.63 million) to state-owned financial firm, PT Permodalan Nasional Madani, said the official on Tuesday (08/18) - Photo by PIP

JAKARTA (TheInsiderStories) – The ministry of finance’ government investment center (PIP) has distributed ultra micro financing of Rp1.2 trillion (US$81.63 million) to state-owned financial firm, PT Permodalan Nasional Madani (PMN), said the official on Tuesday (08/18). The loans have a grace period up to December 2020.

According to CEO of PIP, Ririn Kadariyah, in an official statement released today, the distribution was part of PIP’ commitment to disburse Rp2 trillion to accelerates the National Economic Recovery Program (ERP) by providing loans to micro-businesses which affected by the pandemic.

The distribution of financing with the first sharia scheme with PNM is expected to strengthen and encourage the achievement of equal distribution of welfare for the micro-business in the halal industry. So far, PIP has also distributed Rp400 billion of total commitment to pawnshop company, Perum Pegadaian and Rp768 billion to PT Bahana Artha Ventura.

While, CEO of PNM, Arief Mulyadi at the same release, said the company is highly committed to raising micro businesses was affected by the COVID-19 through the financing program.  64 million micro, small, and medium enterprises players have been seriously affected by this pandemic, he adds.

Indonesian government has prepared the ERP funds around Rp641.12 trillion in the 2020 State Budget. In detail, part of the funds will used to support the consumption budget Rp172.1 trillion and an interest subsidy Rp34.15 trillion.

According to finance ministry, Sri Mulyani Indrawati, the government also provided tax incentives with total amount Rp123.01 trillion, including stimulus reserves amounting to Rp26 trillion. The country also allocates Rp25.27 trillion for capital injection to the state-owned companies (SOEs).

Then, the government provides fuel subsidies in the framework of mandatory biodiesel 30 percent worth of Rp2.78 trillion. in addition, she continued, the compensation payment Rp90.42 trillion for three SOEs, energy firm, PT Pertamina amounting to Rp45 trillion, food operator Perum Bulog at Rp560 billion and power producer, PT Perusahaan Listrik Negara (PLN) worth of Rp45.42 trillion.

For the tourism sectors, her ministry budgeted Rp3.8 trillion, housing Rp1.3 trillion, and spending Rp60 trillion. There are also support for local government worth of Rp15.1 trillion, consisting of special allocation reserves Rp9.1 trillion, economic recovery up to Rp5 trillion, and loans to the regions as much as Rp1 trillion.

Moreover, guarantee of new working capital loans for micro, small, and medium enterprises (MSMEs) Rp6 trillion. Indrawati revealed, the government also provides a bailout fund for MSMEs working capital worth of IDR19.65 trillion and a placement of funds for loan restructuring Rp87.59 trillion.

Funding will be carried out through the state bond issuances purchased by Bank Indonesia through the primary market. Director general at the ministry, Luky Alfirman added, the policy has been ruled by the Presidential Decree Number 23 of 2020

Based on the decree, the economic recovery program can be carried out through the mechanism of placement of funds, guarantees, state capital injection, and government investment. At present, said the minister, the government has completed the design of two programs.

Written by Editorial Staff, Email: theinsiderstories@gmail.com