Indonesia Mulls Working Capital Loan for Housewives to Beat Covid-19 Crisis

JAKARTA, KOMPAS.com – The Indonesian government plans to provide a small business stimulus for housewives through zero-interest-rate working capital loans of two million rupiahs ($136) per debtor, an official said on August 12.

Deputy Coordinating Economic Minister for Macroeconomic and Finance Iskandar Simorangkir said the small business assistance plan is still being discussed by a financing committee that will decide on the scheme this week.

“This type of micro, small and medium loans are soft loans meant for the employees who have been laid off and want to do business as well as the housewives who run micro-businesses,” Kontan.co.id quoted Iskandar as saying.

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Meanwhile, Minister of Finance Sri Mulyani Indrawati recently said that the government’s focus is to revive the economy of ‘unbankable’ individuals or those who have no access to banks.
These microbusinesses usually access loans from the state-owned microfinancing firm Permodalan Nasional Madani (PNM) under its Mekar Program which reaches 6.2 million microbusinesses.

“The majority of the microfinancing beneficiaries from almost 6.2 million business units are women. They do not have access to banks but have direct access to lenders who use government funds,” said Sri Mulyani in a webinar on Government Business Stimulus to Strengthen Micro, Small and Medium Enterprises on August 11.

Apart from the interest-free working capital loans, the government has also set up its social assistance program known as bansos in the form of cash transfers of 2.4 million rupiahs ($163) to 12 million small businesses with a budget of nearly 30 trillion rupiahs ($2 billion).

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The government is likely to distribute the assistance through cooperatives, state pawnshop Pegadaian, state-owned microfinancing firm PNM and Wakaf micro-bank.

“Currently the government is focusing on this category [of business units]. The government is providing social assistance and credit of around two million without interest rate for ‘unbankable’ micro-businesses,” said the minister.

(Editor: Erlangga Djumena)

Source: https://money.kompas.com/read/2020/08/12/150300326/pemerintah-akan-beri-modal-kerja-rp-2-juta-bagi-ibu-rumah-tangga?page=2.