ANNOUNCEMENT 31 May 2020

In May 2020, Indonesia provided an interest rate subsidy for MSME credits with a total budget of at least USD 1260.5 million by using loans from the Asian Infrastructure Investment Bank (AIIB), the World Bank, and KfW. 

 

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising
Inception date: 31 May 2020 | Removal date: 31 Mar 2021

Interest payment subsidy

On 31 May 2020, the Asian Infrastructure Investment Bank (AIIB), the World Bank, and KfW provided loans of USD 2521 million in total for the COVID-19 Active Response and Expenditure Support Program launched by Indonesia. As part of the program, at least 50 percent (USD 1260.5 million) of the loans should be used to support at least 10,000 MSMEs by providing an interest rate subsidy.

The scheme also includes other measures that were out of the scope of the GTA, specifically:

  1. Food assistance (Kartu Sembako) beneficiaries increased to 20 million households by December 2020;
  2. Social assistance PKH increased to 10 million households by December 2020;
  3. Full reimbursement of COVID-19 related hospital expenses under public health by December 2020;
  4. Testing for COVID-19 increased to reach 800,000 people by December 2020;
  5. Incentives for medical workers increased as Ministry of Health’s (MOH) guideline by December 2020; and
  6. 6-months income tax relief implemented for manufacturing workers with annual incomes less than USD14,000 by December 2020.

The disbursement of the loan will start from 31 May 2020 to 31 March 2021 and the resources will be used by the Indonesian authorities to finance the above-mentioned measures.

AFFECTED SECTORS

 
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AFFECTED PRODUCTS

 
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