JAKARTA, September 2 (Reuters) – Indonesia’s central bank has released new rules to make it easier for banks to meet requirements to support small and medium-sized businesses, in a move also aimed at strengthening economic recovery from the COVID-19 pandemic, he said. she said in a statement.
The new rules replaced a 2015 regulation requiring banks to provide 20% of their total loans to micro, small and medium enterprises (MSMEs), which some banks struggled to meet due to a lack of expertise in the granting of such loans.
Under the new regulations, which will come into effect in June next year, banks must finance at least 20% of their total portfolio for MSMEs, their supply chains or low-income people in what the Bank Indonesia (BI) calls the Inclusive Macroprudential Financing Ratio (RPIM)
The channeling of loans through other banks or non-bank financial companies as well as the purchase of securities issued for inclusive financing will also count as responding to the RPIM.
The mandatory ratio will rise to 25% in June 2023 and 30% in June 2024 and banks that do not comply with the ratio will have to pay fines.
“The BI regulation was released as part of BI’s efforts to increase economic inclusion and open up financial access, as well as to strengthen the role of MSMEs in national economic recovery,” BI said in a statement on Wednesday. evening.
The new rules will also provide more options for banks to meet MSME minimum credit requirements, he said.
Islamic banks must also comply with the new rules.
(Reporting by Gayatri Suroyo; Editing by Martin Petty)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.