Indonesia to subsidise small firms' interest payments to support economy

DAMPAK VIRUS CORONA - JAKARTA. Indonesia will subsidise interest payments for more than 53 million small companies as part of stimulus efforts to help Southeast Asia's largest economy weather the impact of the coronavirus, its finance minister said on Wednesday.

Small companies account for more than half of Indonesia's gross domestic product and provide many jobs in the country of more than 260 million people.

The government will help pay a portion of the interest for loans of up to 10 billion rupiah ($655,308) taken out by micro, small and medium enterprises (MSMEs), provided by banks, the state pawnshop chain Pegadaian or other financing companies, Minister Sri Mulyani Indrawati told reporters.

Read Also: Indonesia government to defend coronavirus spending in top court

A total of 271 trillion rupiah ($17.76 billion) of loans may benefit from the programme, Indrawati said.

Lenders may have to restructure loans and delay principal payments by up to six months for debtors to get subsidised, she said.

Other economic stimulus the government has already announced include a corporate tax cut and an import tax break.

Luky Alfirman, who heads the finance ministry's debt department, said in a call with investors the government was also in the process of drawing up a 150 trillion rupiah recovery programme for after the epidemic is over. ($1 = 15,260 rupiah)