A sales representative demonstrates a home loan app during a property expo in Plaza Mandiri, South Jakarta. (Photo: jakartapost.com) Jakarta (VNA) – The Indonesian government will broaden its loan interest subsidies as part of a debt relief programme for those affected by COVID-19.
The subsidies include mortgage loans (KPR), automotive loans (KKB), and loans taken out by micro, small and medium enterprises (MSMEs).
The Indonesian government is working with the Financial Services Authority (OJK) to prepare the debt relief programme.
In a statement, the OJK said it will support the government’s relief programme related to the provision of loan interest subsidies for borrowers from banks and financing companies.
Borrowers with loans classified under “collectability one” and “collectability two” were eligible for the subsidies, as well as automobile loans under 500 million rupiah (33,156 USD) and housing loans for properties of up to 70 square meters.
The payments will be given for six months, from April to September of this year.
The interest subsidies for loans fewer than 500 million rupiah will be 6 percent for the first three months and 3 percent for the remaining three months. For loans between 500 million rupiah and 10 billion rupiah, the interest subsidies will be 3 percent for the first half of the stimulus period and 2 percent for the second half.
Experts have said that the subsidy will help not only borrowers, many of whom are under pressure as a result of the economic impacts of the COVID-19, but also banks and financing companies that are facing missed payments and rising defaults on loans.
Indonesia’s banking industry recorded a non-performing loan rate of nearly 2.8 percent in February, the highest since May of last year./.
