Finance Ministry Initiates Synergy Program to Implement Government’s Plans

MINISTRY of Finance has initiated loan disbursement program for small and micro-scale industries in villages. This is a synergy program of Ministry of Finance with State-Owned Enterprises (BUMN) and Non-Bank Financial Institutions (LKBB). An activity with the theme “Synergy of Government Program for The People’s Welfare” was held at Kampung Pojok, Desa Sindang Sari, Serang Banten to promote the program.

Finance Minister Sri Mulyani Indrawati and Minister of Public Works and Public Housing Basuki Hadimuljono attended the activity which was held on Friday (15/3/2019). Some state-owned banks like Bank Mandiri, Bank Rakyat Indonesia (BRI), Bank Tabungan Negara (BTN), Bank Negara Indonesia (BNI) participated fully in the program as well as PT Rajawali Nusantara Indonesia (RNI), PT Perusahaan Listrik Negara (PLN) dan Perusahaan Daerah Air Minum (PDAM) Pandeglang. The Indonesia Palm Oil Plantation Fund Management Agency (BPDPKS) also took part and support the program.

Presented an information booth, BPDPKS provided information to the publics on palm oil, from plantation aspect to downstream industry. Visitors could also stop over in the booth for information on the expanded B20 mandatory program. On a press release (15/3/201), it is said that the synergy program included Ultra Micro Finance (UMi), Provision of Clean Water (PAMSIMAS), and Provision of Electricity to Remote Villages by PT Perusahaan Listrik Negara (PT PLN). The program is expected to improve quality of life in rural areas.

This is a pilot project of Social Impact Investment (SII) in Indonesia to improve the people’s welfare. SII is an investment instrument focusing on social impact combined with financial profit.  SII includes Ultra Micro (UMi) financing and Micro Credit Program (KUR). Currently, UMi which was launched by the Ministry of Finance in mid 2017, has reached 34 provinces and nearly 540 districts/cities. UMi has disbursed loans of Rp2.1 trillion to 846,572 micro businesses in 2018. In Banten province alone, the loans have reached Rp90.5 billion disbursed to 32,538 micro-businesses and Rp15.8 billion to 5,888 micro businesses.

Serang regency is the second region after the Tangerang district in Banten province received the biggest funding facility from UMi. The loan facility is mainly provided for startup businesses with a maximum Rp10 million in capital. The number of micro businesses has reached 72 percent or 44 million from the business sector nationally. Once the ultra micro businesses have grown up to Small and and Medium Enterprises (SMEs), the Government will provide provide affordable financing support through the Micro Credit Program (KUR) scheme.

This credit is intended for SMEs that need financial support but are unable to get loans from bank. Under the scheme, SMEs are able to get affordable low interest loans up to Rp500 million. Since 2015, a total of Rp333 trillion loans have been disbursed to SMEs in Indonesia under KUR scheme. In Banten Province alone, a total of Rp7 trillion loans have been disbursed to 243 thousand SMEs and about Rp660 billion of them for 23.372 SMEs in Serang. To improve quality of life and support UMi, the Government has collaborated with PT PLN to increase electricity provision in 72.141 villages in 2016 to 75.682 in 2017.

Meanwhile, in provision of clean water, PAMSIMAS has completed projects at 22.961 villages desa in 376 regencies/cities in 33 provinces. The program has provided safe drinking water facilities for 16,7 million people and sanitation facilities for 15,4 million people. ***