Riska Rahman, Jakarta – The State-Owned Banks Association (Himbara) has expressed optimism that its bank members can disburse up to Rp 90 trillion (US$6.32 billion) in loans to help small businesses to recover from the severe economic impact of the COVID-19 pandemic.
Himbara chairman and Bank Rakyat Indonesia (BRI) president director Sunarso said on Wednesday the banks were ready and committed to expand their loan disbursements to three times the amount of funding placed by the government as part of its national economic recovery program.
The four Himbara members comprise BRI, Bank Negara Indonesia (BNI), Bank Tabungan Negara (BTN) and Bank Mandiri.
"We will prioritize the disbursement to the micro, small and medium enterprises [MSMEs] segment in several sectors like food and distribution, tourism, transportation, housing and construction," Sunarso said during a livestreamed press briefing in Jakarta.
The banks deem these sectors as having potential demand amid the easing of the large-scale social restrictions (PSBB) as the government strives to keep the economy running.
Finance Minister Sri Mulyani Indrawati announced last week that the government would place Rp 30 trillion in state-owned banks to be disbursed as loans to businesses to help support economic recovery. The government has also allocated Rp 12 trillion to guarantee working capital loans for small businesses.
The fund placement and the working capital loan guarantee are part of the government's Rp 695.2 trillion budget to mitigate the impact of the COVID-19 pandemic, which has battered Indonesia's healthcare system and the social and economy sectors.
The government now expects the country's economy to contract by 0.4 percent this year under the worst-case scenario or grow 1 percent under the baseline scenario as the pandemic ravages the economy.
Sunarso also said the banks were open to disbursing the loans to segments other than MSMEs as long as the borrowers' activity could boost the country's economic growth and maintain their business sustainability amid the pandemic.
Bank Mandiri, for instance, has committed to focusing on disbursing the loans to MSMEs and selected companies in the trade and services sectors, including hotels.
"We will help fund those businesses as long as they have expansion potential in this economic situation, especially those in green zones that have relaxed their PSBB measures," Bank Mandiri president director Royke Tumilaar said during the same briefing.
Similarly, BNI president director Herry Sidharta said the bank would disburse the loans to businesses in the COVID-19 green zones to help the economy recover.The bank, he said, would also focus on channeling the funding to the transportation sector, as well as labor-intensive businesses to help bolster economic growth.
Although the property sector has yet to recover from the impact of the COVID-19 pandemic, BTN president director Pahala N. Mansury said it would remain focused on disbursing loans to the housing sector as he believed that the gradual lifting of restrictions created a positive environment for mortgages.
"We saw around a 30 to 40 percent increase in subsidized housing loan demand in June compared with May," he said.
Herry of BNI added that the bank would conduct digital analysis of the loans, as well as creating assistance programs to help MSMEs to expand their markets and find the right vendors for their businesses.
"We will adjust the amount of disbursement to the demand to ensure the loan quality," Sunarso said.
Given the tight liquidity risks that banks are facing in the pandemic, he gave an assurance that the banks would seek more third-party funding to cover the remaining Rp 60 trillion of the loan-expansion plans.
Third-party funding grew strongly by 8.08 percent year-on-year (yoy) in April compared with loan growth, which slowed to 5.7 percent annually from 7.9 percent in March, Bank Indonesia (BI) data show.