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State-owned banks disburse nearly $3 billion in working capital loans using govt funding
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Rupiah banknotes (Shutterstock.com/Maciej Matlak)
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tate-owned banks have collectively disbursed Rp 43.5 trillion (US$2.99 billion) in working capital loans using funding provided by the government, deputy State-Owned Enterprises (SOEs) minister Kartika “Tiko” Wirjoatmodjo has said.
Tiko said on Tuesday the loans were disbursed to 518,797 borrowers as of July 22.
The figure was equal to 145 percent of the total Rp 30 trillion provided by the government in June, which was intended to be channeled as loans to shield businesses from the impact of the COVID-19 pandemic.
“This seems to be supported by the fact that interest in new loans increased in July, a month after the government made the funds available on June 25,” he said during a webinar organized by the Institute of Development on Economics and Finance (Indef).
Read also: State banks to disburse $6.32b in loans to help businesses recover from COVID-19 hit
The provision of the funding is part of the government’s stimulus worth Rp 695.2 trillion to strengthen the healthcare system and bolster the economy. The funds are supposed to help bank liquidity and stimulate credit growth, as banks conduct credit-restructuring for micro, small and medium enterprises (MSMEs), while business players can use the loans to support expansion plans during the pandemic.
The Indonesian economy grew 2.97 percent in the first quarter of this year, the slowest in 19 years. The government expects the economy to shrink by up to 5.08 percent in the second quarter as the outbreak paralyzes business activity.
Tiko went on to say that Bank Rakyat Indonesia (BRI) had disbursed Rp 21.21 trillion, while Bank Mandiri had disbursed Rp 14.93 trillion in loans. Those figures were higher than the government’s fund placement of Rp 10 trillion in each bank.
Read also: Banks ask OJK to extend debt relief program amid mounting COVID-19 cases
Bank Negara Indonesia (BNI) also managed to disburse Rp 6.04 trillion from the Rp 5 trillion of government-provided funding, while Bank Tabungan Negara (BTN) only disbursed Rp 3 trillion of the Rp 5 trillion of government funds placed with the bank.
Tiko said that the disbursement would hopefully continue until August with a total disbursement of Rp 90 trillion, three times the amount of funding aimed at fueling the economy.
“Once we reach this target, we hope the government will place more funds [in state-owned banks] so we have the ammunition to be more aggressive in disbursing new loans,” he said.
