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Govt to disburse $1.49b in cash transfers to unbankable small businesses
MSMEs, which account for around 60 percent of Indonesia’s gross domestic product (GDP), are among the hardest-hit businesses during the coronavirus outbreak as demand weakens and bank loans become harder to access.
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A worker makes a guitar at the Guitars Gore workshop in Lebak, Banten, on Feb. 17. (Antara/Muhammad Bagus Khoirunas)
T
he government is set to disburse on Monday Rp 22 trillion (US$1.49 billion) in cash transfers for millions of unbankable micro, small and medium enterprises (MSMEs) to help them start over during the slowing, pandemic-hit economy.
According to Cooperatives and Small and Medium Enterprises Minister Teten Masduki, funds had been allocated for the first phase of the program, which will see 9.1 million MSMEs receive Rp 2.4 million each. It eventually aims to provide cash transfers for 12 million MSMEs.
He said the government had compiled data on around 17 million MSMEs, including from cooperatives, regional administrations and the Financial Services Authority (OJK), adding that the government would “verify and validate” the data so that the stimuli could be “well-targeted”.
“The President has agreed to provide productive aid for MSMEs in a bid to address their financing problems,” Teten told reporters in a virtual press briefing. “The COVID-19 pandemic has hit MSMEs hard as it has disrupted their supply, distribution and demand.”
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MSMEs, which account for around 60 percent of Indonesia’s gross domestic product (GDP), are among the hardest-hit businesses during the coronavirus outbreak as demand weakens and bank loans become harder to access.
With sudden closures and falling demand, around half of small businesses are running out of cash or savings, according to a survey of 1,165 businesses conducted between April and May by the Asian Development Bank (ADB).
