Government assures SMEs of more subsidized loans<\/p>\n
JAKARTA (JP): Minister of Finance Bambang Subianto reaffirmed
\non Monday the government's commitment to provide cheap loans to
\nhelp small and medium-size companies (SMEs) and cooperatives
\nsurvive the prolonged economic crisis.<\/p>\n
The minister said Bank Indonesia, which under the newly
\napproved central bank law would focus its activities on monetary
\nmanagement, would no longer be involved in extending the
\nsubsidized loans.<\/p>\n
\"It is the government's task to administer the subsidized loan
\nschemes, not Bank Indonesia's,\" he said before a Cabinet meeting
\nat the Presidential Palace.<\/p>\n
Bambang said the subsidized loan schemes, including Farming
\nCredit and Credit for Working Capital for Cooperative Members,
\nwould still be implemented using the currently applied interest
\nrates.<\/p>\n
He said the disbursement of the loans was being handled by a
\nnumber of banks, including Bank Rakyat Indonesia, Regional
\nDevelopment Bank, Bank Bukopin and other banks with extensive
\nnetworks.<\/p>\n
\"Corporate banks are not suitable to disburse these kinds of
\nloans,\" he said.<\/p>\n
The government introduced in October last year a heavily
\nsubsidized loan package worth Rp 10.8 trillion (US41.2 billion)
\nto fund 17 microcredit schemes designed to help SMEs.<\/p>\n
Loans issued under the schemes have interest rates of between
\n6 percent and 16 percent a year, compared to the nearly 40
\npercent interest rates charged for commercial loans.<\/p>\n
The subsidized loans -- covering a number of sectors in the
\neconomy, including farming, fisheries, housing, trade and
\ncommerce and poultry farming -- are disbursed through commercial
\nbanks with the help of cooperatives and non-governmental
\norganizations across the country.<\/p>\n
The cheap credit schemes have been widely criticized, with
\ncritics saying the loans given to people in the informal sector
\nhamper the country's economic growth because of the low
\nproductivity of the sector.<\/p>\n
According to Minister of Cooperatives and Small Enterprises
\nAdi Sasono, of the Rp 10.8 trillion allocated for the credit
\nschemes, the government has as of March disbursed over Rp 4
\ntrillion, including Rp 2.97 trillion to some 2.98 million
\nfarmers. (cst)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/government-assures-smes-of-more-subsidized-loans-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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