The Indonesian government's move to launch a credit guarantee programme for labour-intensive corporations has been welcomed positively by automotive industry players, which have been classified under the priority sector.
Government guarantees for labour-intensive corporations are carried out through the provision of guarantee facilities so that banks can increase working capital credit exposure to business players. This programme was officially launched on July 29th.
Yusak Billy, director, business innovation, sales and marketing, Honda Prospect Motor (HPM) said that with the addition of working capital loans, corporations can carry out maximum activities during the corona virus pandemic.
"It is hoped that through this programme, corporations can also avoid the action of terminating workers," he told a daily.
The policy included in the National Economic Recovery (PEN) programme provides additional guaranteed working capital loans worth IDR 10 billion (US$ 694,280) and going up to IDR 1 trillion.
In the corporate working capital credit guarantee scheme, the guarantee portion is 60% of credit, but for priority sectors, the guaranteed portion is up to 80% of credit. The priority sectors include tourism, automotive, textiles and textile products, footwear, electronics, processed wood, furniture, paper products, and other sectors affected by COVID-19.
Jongkie D. Sugiarto, chair I of the Association of Indonesian Automotive Manuifacturers (Gaikindo), welcomed the government's efforts in restoring labour-intensive industries.
"Hopefully the process will run smoothly and the automotive industry can utilize the assistance," he said.
The Coordinating Minister for the Economy, Airlangga Hartarto said that the programme is aimed at supporting the needs of labour-intensive corporations for additional working capital loans in order to be able to resume maximum activities during the pandemic.