Ada Pertanyaan? Hubungi Kami 
Ada Pertanyaan? Hubungi Kami Fathan Qorib, Robert Sidauruk
Bank Indonesia has introduced a new program that intends to assist small-medium scale businesses (UMKM) in getting funds from foreign banks. This program is referred to as the linkage program.
The scheme involves foreign banks providing funds to rural and commercial banks, which will in turn redistribute the investment to UMKMs.
“This is a solution for rural banks and UMKMs to attract foreign banks,” said Zainal Abidin, Director of Rural Banks and UMKMs at Bank Indonesia, in Jakarta, Friday (19/4).
Zainal explained that most foreign banks generally fund big export companies and that UMKMs are also involved in the export activities that require funding. The difference lies in the products exported, where UMKMs mostly export handcrafted and agricultural products.
The linkage program can also be used by commercial banks to increase their mandatory minimum ratio to finance UMKMs. This obligation is stipulated under Bank Indonesia Regulation No. 14/22/PBI/2012 on Credit and Financing by Banks and Technical Assistance for Development of Small-Medium Scale Businesses (Regulation).
Pursuant to Article 2 of the Regulation, 20% of the total financing in a bank must be distributed to UMKMs. This obligation must be achieved by 2018 and the linkage program will likely help commercial banks to reach this target.
However, Zainal admitted that the linkage program might result in an increased number of non-performing loans.
To avoid this, Zainal concluded that it is important for banks to thoroughly inspect investing partners before proceeding with the program.
(hot/jt)
Fathan Qorib, Robert Sidauruk
Bank Indonesia has introduced a new program that intends to assist small-medium scale businesses (UMKM) in getting funds from foreign banks. This program is referred to as the linkage program.
The scheme involves foreign banks providing funds to rural and commercial banks, which will in turn redistribute the investment to UMKMs.
“This is a solution for rural banks and UMKMs to attract foreign banks,” said Zainal Abidin, Director of Rural Banks and UMKMs at Bank Indonesia, in Jakarta, Friday (19/4).
Zainal explained that most foreign banks generally fund big export companies and that UMKMs are also involved in the export activities that require funding. The difference lies in the products exported, where UMKMs mostly export handcrafted and agricultural products.
The linkage program can also be used by commercial banks to increase their mandatory minimum ratio to finance UMKMs. This obligation is stipulated under Bank Indonesia Regulation No. 14/22/PBI/2012 on Credit and Financing by Banks and Technical Assistance for Development of Small-Medium Scale Businesses (Regulation).
Pursuant to Article 2 of the Regulation, 20% of the total financing in a bank must be distributed to UMKMs. This obligation must be achieved by 2018 and the linkage program will likely help commercial banks to reach this target.
However, Zainal admitted that the linkage program might result in an increased number of non-performing loans.
To avoid this, Zainal concluded that it is important for banks to thoroughly inspect investing partners before proceeding with the program.
(hot/jt)