Indonesia launches $7 billion loan guarantee scheme for ‘priority’ companies

Indonesia on Wednesday rolled out a 100 trillion Rupiah ($6.92 billion) loan guarantee scheme for prioritized businesses to keep them afloat as the COVID-19 situation continued to worsen around the world, the country’s finance minister said.

The program will offer working capital loans amounting between 10 billion to 1 trillion Rupiah for a period of up to a year.

In addition, the government will offer a guarantee for up to 80% of loans for companies in priority sectors such as tourism, automotive, textile and garment, and electronics.

The loan guarantee scheme comes as part of a previously announced initiative to help small businesses recover from the economic impact of the pandemic.

Loan growth rate in South-East Asia for May expanded by 3.04% year-on-year, its weakest since late 2002, as the pandemic took its toll on the economy.