Homegrown ride-hailing app Go-Jek will facilitate small and medium enterprises (SMEs), which serve as its Go-Food merchants, to gain access to subsidized micro-credits (KUR) through state-owned lender Bank Negara Indonesia (BNI).

Of the 125,000 Go-Food merchants, 80 percent are small and medium enterprises (SMEs).

Go-Jek will cater first to eligible SMEs based on their transaction history on its digital platform, Go-Pay, before confirming their willingness to access the loans.

“We’ll select Go-Food merchants, who qualify for the subsidized loans, and ask them if they want the loans. We’ll then give their profiles to BNI,” said Go-Pay CEO Aldi Haryopratomo.

As a follow-up, the lender will assess the merchants’ feasibility to obtain credit, including whether they are “visible” and “unbankable”.

It will then funnel a maximum of Rp 25 million (US$1,750) of loans to suitable candidates who will not be required to provide any collateral.

The government has lowered the interest rate for micro-credit to 7 percent this year from 9 percent last year in a bid to stimulate demand for fresh funds.

The partnership between both companies is expected to boost BNI’s micro-credit disbursement as the lender aims to channel Rp 13.5 trillion in such loans this year, up by 12 percent from last year.

“We are aiming to disburse Rp 1.5 trillion in KUR to Go-Food merchants who own mostly micro businesses,” said BNI small business division chief Bambang Setyatmojo.

The bank will benefit from the collaboration by being able to better manage risks and reduce its non-performing loans ratio as it will use the merchants’ data provided by Go-Pay.

“SMEs are our foundation. If they can grow, we can flourish as well,” Aldi said.

Go-Jek has received a huge amount of funding to date and this has enabled it to accelerate its business expansion, including its e-wallet service Go-Pay.

In February, it announced that it had received a $150 million investment from diversified conglomerate Astra International — one of the country’s largest distributors of cars and motorcycles.

At the same time, PT Global Digital Niaga confirmed its investment in Go-Jek for an undisclosed amount.

Google, Singapore-based Temasek and China-based Meituan-Dianping reportedly also invested in the ride-hailing company as part of a $1.2 billion fund raising round.

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