Gov’t Provides Rp35.2 Trillion Interest Subsidy for MSMEs

Infographic of loan interest subsidy for MSMEs. Source: Ministry of Finance.

The Government provides Rp35.2 trillion for interest subsidies for Micro, Small, and Medium Enterprises (MSMEs).

“The interest subsidy will be provided for 6 months, in accordance with Regulation of Minister of Finance Number 65/2020,” Djoko Hendratto, Director of Investment Management System, Directorate General for Treasury (DJPb) of Ministry of Finance said on Friday (19/6).

He went on to say that the criteria for interest subsidy to MSMEs include:

First, for banks and finance companies, a 6% interest subsidy will be provided for the first 3 months and 3% for the next 3 months for loans up to Rp500 million.

“For loans above Rp500 million to Rp10 billion, the interest subsidy is 3% for the first 3 months and 2% for the second three months,” the Director said.

Second, credit institutions, including cooperatives, BLU (Public Service Agency), state pawnshop PT Pegadaian and state investment company PNM.

“For loan up to Rp10 million, almost all of the interest is subsidized by the Government with a maximum interest of 25%,” Djoko explained.

For loans above Rp10 million to Rp500 million, the interest subsidy is 6% for the first 3 months and 3% for the next 3 months.

“For loans above Rp500 million (up to Rp10 billion) the subsidy is 3% in the first 3 months and 2% for the next 3 months,” he explained.

He further said that the program includes 102 commercial banks, 1,570 credit banks, 176 sharia credit banks, 110 leasing companies registered with the Financial Services Authority (OJK), micro credit programs (UMi, and Mekaar), PT PNM, and PT Pegadaian.

“A total number of cooperatives are 297 in four Public Service Agency, namely the Center for Government Investment (PIP), the Revolving Fund Management Agency (LPDB), the Marine and Fisheries Financing Management Agency (LPMUKP) and the Forest Development Financing Center (P2H),” he said.

In the meantime, Head of the Financial Sector Policy Center of the Fiscal Policy Agency (BKF) Adi Budiarso said that the Government provides Rp402.45 trillion stimulus fund for business sector to overcome the impact of COVID-19.

“It includes allocations for Ultra Micro and MSMEs with the total amount of Rp123.46 trillion through interest subsidies, placement of funds for MSMEs restructuring, Guarantee Services (IJP) spending, guarantees for working capital (stop loss), Final Income Tax subsidy, and investment financing through the Revolving Fund Management Agency of Cooperatives, Micro, Small, and Medium Enterprises Cooperatives (LPDB KUMKM),” Adi said. (Ministry of Finance/EN)

Translated by: Ridwan Ibadurrohman
Reviewed by: Yuyu Mulyani