Cooperatives financing raises concerns over SOE banks, fiscal risks
Experts argued that SOE banks still need to assess the commercial viability of the cooperatives and not just rely on the government backstop.
Concerns over state-owned enterprise (SOE) banks and fiscal risks have arisen due to financing for cooperatives, according to experts. Red and White Cooperatives (KDMP) face looming loan repayments as President Prabowo Subianto's priority program prioritizes cooperative development. The government aims to establish 80,000 cooperatives nationwide, backed by state-owned banks providing syndicated loans of around Rp 220 trillion (US$12.3 billion).
However, this target was later adjusted to 40,000 cooperatives, with 30,000 to be operational by year-end. Bank Negara Indonesia (BNI), Bank Rakyat Indonesia (BRI), Mandiri, and Bank Syariah Indonesia (BSI) each contributed Rp 55 trillion to fund the six-year, 72-month syndicated loan at a 6 percent interest rate. The first loan installment is due in September, with repayment ultimately covered by the government through state budget allocations.
Despite assurances from state asset fund Danantara Dony Oskaria that the financing scheme would not strain SOEs, concerns persist regarding the fiscal capacity and commercial viability of the program.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
