news     July 28, 2020

These are the Regional Criteria that Can Apply for Loans from the Central Government

Minister of Finance Sri Mulyani Indrawati revealed various regional criteria that wanted to apply for an economic recovery loan through PT Sarana Multi Infrastruktur (SMI).

According to him, the criterion that must be met is that the economy is affected by Covid-19 and the region already has projects that are ready to be executed or realized.

DKI Jakarta and West Java, for example, according to Sri Mulyani, both provinces received loans from SMI because both social and economic conditions suffered a very heavy blow due to Covid-19.

“[contribution] Java is 57% of Indonesia’s GDP, DKI is not mistaken 18%, if DKI and West Java could rise it might have been around 30% of all Indonesian GDP. So the effect is very large on our entire economy,” Sri Mulyani said, Monday (7/27).

Not only that, these two regions have also proposed projects to be funded where they are relatively ready to be realized.

According to Sri Mulyani, in addition to DKI Jakarta and West Java, the regions being discussed to obtain this loan were East Java and Central Java. However, according to Sri Mulyani, they had to submit a formal request to the government.

“We hope East Java and Central Java are being discussed. They may have to submit formal requests such as Mr. Anies and Mr. Ridwan, formally conveying the need for loans,” explained Sri Mulyani.

According to Sri Mulyani, the existence of this loan is important for local governments, so that existing projects can be re-run. That way, the community’s economy can rise again.

Sri Mulyani ensured that in her supervision, the Ministry of Finance would continue to conduct monitoring which would also involve the Ministry of the Interior. He also hopes that this loan instrument can continue to be done and improve both in terms of volume and shape, so that it becomes a truly useful instrument for local governments.

Meanwhile, the loan proposed by the DKI Jakarta government is Rp 12.5 trillion, divided into loan proposals of Rp 4.5 trillion in 2020 and Rp. 8 trillion in 2021. The budget will be used to finance infrastructure constrained by funds, especially the service sector. drinking water, flood control, waste management, transportation, tourism and sports.

Meanwhile, the West Java Provincial Government submitted a loan of Rp 4 trillion, divided into Rp 1.9 trillion in 2020 and Rp 2.09 trillion in 2021.

The budget will be used to finance infrastructure development such as social infrastructure, namely hospitals, health centers, health facilities, logistical infrastructure such as roads, provincial and district or city bridges, MBR housing, special area management, and environmental infrastructure such as irrigation and drainage.

In relation to this Local Government loan policy, there are some relaxation in the regulation, including cheap loan interest, the loan period is no longer than 10 years and can be stated in the APBD/APBD Amendment and/or Regional Head Regulation regarding changes in the APBD details prior to the APBD Amendment.

In its implementation, the Regional PEN Loan is managed by the Directorate General of Fiscal Balance and implemented through PT SMI (Persero) as a Special Mission Vehicle (SMV) under the Ministry of Finance.


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