The Jakarta Post
Indonesia is running out of time to rescue its businesses from the impact of the coronavirus pandemic, and banks should immediately ramp up promised working capital loan disbursement to bolster the economy, businesspeople have said.
Indonesian Chamber of Commerce and Industry (Kadin) chairman Rosan Roeslani said the implementation of one of the government’s stimulus programs was too slow, urging banks to soon disburse working capital loans after receiving fresh funds of Rp 30 trillion (US$2.08 billion) from the government.
“After the debt restructuring process, we now need working capital loans for micro, small and medium businesses as well as [big] businesses,” Rosan told reporters in a press conference on Thursday.
Without working capital loans from banks, he went on to say, debt restructuring would not have much of an impact in stimulating supply and demand. He added that several business associations had complained about banks’ reluctance to provide working capital loans.
The government announced last week that it would place Rp 30 trillion in state-owned banks to be disbursed as loans to micro, small and medium enterprises (MSMEs) to help support economic recovery as the pandemic wrecked the economy.
The government is following through on its promise to allocate fund placements in banks worth a total of Rp 82.2 trillion to help with their liquidity and stimulate credit growth as banks conduct credit restructuring for MSMEs. The allocation is part of the government’s stimulus worth Rp 695.2 trillion to strengthen the healthcare system and bolster the economy.
Bank Mandiri and Bank Rakyat Indonesia (BRI) will each receive Rp 10 trillion, while Bank Negara Indonesia (BNI) and Bank Tabungan Negara (BTN) will each receive Rp 5 trillion.
The State-Owned Banks Association (Himbara) has expressed optimism that its members can disburse up to Rp 90 trillion in loans after receiving the funds.
The government should also pump state funds into banks “specifically to help stimulate working capital loans for big firms”, said Indonesian Employers Association (Apindo) chairman Hariyadi Sukamdani.
Indonesia’s loan growth slowed to 5.7 percent year-on-year (yoy) in April from 7.9 percent recorded in March, Bank Indonesia (BI) data show, as the pandemic discourages loan demand amid disrupted business activity. At the same time, some borrowers are facing difficulties in repaying their loans.
Financial Services Authority (OJK) data show that Indonesian banks have provided 6.35 million debtors with credit restructuring worth Rp 695.3 trillion as of June 22, following the issuance of OJK Regulation No. 11/2020, which instructs financial institutions to provide relief for borrowers affected by the COVID-19 pandemic.
“Credit restructuring has grown significantly in banks [categorized as] BUKU IV, with the highest growth recorded in the trade sector,” OJK chairman Wimboh Santoso told lawmakers in a hearing on Monday. “We will ask banks to start providing loans for borrowers again.”
“Banks’ liquidity is ample and ready to be disbursed, but it would depend on the development of the real sector amid a spike in the coronavirus infection [rate],” said OJK public relations and logistics deputy commissioner Anto Prabowo.
“We will maintain coordination with business associations and the financial industry to speed up disbursement of working capital loans.”