Govt to increase guarantee on microcredit

JAKARTA: The government will increase its guarantee on microloans for small industries — agriculture, maritime and fisheries and forestry — to Rp 10 trillion (US$1.1 billion) next year from Rp 6 trillion last year, an increase of 66.7 percent.

President director of credit insurance company Asuransi Kredit Indonesia (Askrindo), Antonius Chandra S. Napitupulu, said on Wednesday during a media gathering that Askrindo would guarantee 500,000 small and medium enterprises (SMEs).

“Each of them will receive Rp 20 million,” he said in Jakarta.

Antonius said that with this guarantee, banks providing loans to SMEs could reclaim their money from Askrindo if the SMEs failed to pay back after two years.

“There are 19 banks to give loans to SMEs,” he said further.

The 19 banks are comprised of 13 regional development banks (BPDs) and six state-run banks, among them are Bank Mandiri, Bank Tabungan Negara (BTN), Bank Negara Indonesia (BNI) and Bank Rakyat Indonesia (BRI).