Cash Transfers for Indonesian MSMEs to be Extended to Next Year

JAKARTA, KOMPAS.com – The Indonesian government plans to extend its cash transfer program of 2.4 million rupiahs ($163) for micro, small and medium enterprises (MSMEs) until next year if the economy remains weak, a minister said on Monday, September 7.

“We have set a target of disbursing this cash assistance (Banpres) to all 12 million micro-businesses by the end of September 2020,” said Minister of Cooperatives and Small-Medium Enterprises Teten Masduki in his speech during a virtual workshop titled Cooperatives, SMEs Survive and Able to Adapt during the Covid-19 Pandemic and New Normal Era.

“However, if the national economic growth in the first quarter of 2021 will remain flat, the cash transfers would likely be continued,” Teten added.

Also read: Finance Ministry Disburses Cash Transfers to 700,000 Indonesian MSMEs

The cash assistance program, which initially runs from August 17 to December 31, aims to support the MSMEs to survive the sluggish economy during the Covid-19 crisis.

He went on to say that it is not only Indonesia that is hit badly by the pandemic, but also almost all countries in the world. Teten said 295 countries are affected by the Covid-19 and each country has its policies to ease the financial burden on businesses and affected people.

In Indonesia, he said, the government has prepared assistance programs especially for the MSMEs. The assistance provided for the MSMEs has been adjusted to meet their needs.

“The cash assistance is provided for the MSMEs that have been severely affected,” he said.

“And for the MSMEs that experience financial difficulties while their business activities are still running, they are provided with debt restructuring in the form of interest subsidy for six months, tax breaks, and three percent interest loan,” he explained.

Furthermore, Teten said the government has also supported the MSMEs in promoting their products.

Also read: Jokowi Optimistic Indonesian Economy Will Grow in 2021 Despite Covid-19

The minister said 307 trillion rupiahs ($20.7 billion) from the 2020 state budget has been allocated for ministries or institutions that could be utilized by the MSMEs. However, he said, it is only used about eight percent of the budget allocation. “Therefore, we are also working with the LKPP [National Public Procurement Agency] to accelerate its absorption,” he said.

He added that the Ministry of Cooperatives and Small-Medium Enterprises also works closely with the Ministry of State-Owned Enterprises to encourage the MSMEs to participate in projects below 19 billion rupiahs ($1.2 million) such as in the procurement of goods and services as well as the infrastructure sector.

(Writer: Elsa Catriana | Editor: Erlangga Djumena)

Source: https://money.kompas.com/read/2020/09/08/063400426/menkop-teten-soal-blt-umkm-rp-24-juta-diperpanjang.