JAKARTA (Reuters): Indonesia's government plans to inject funds into four state-owned banks this year to boost liquidity for providing low-interest loans to village cooperatives, Finance Minister Sri Mulyani Indrawati said on Monday.
The initiative aims to support President Prabowo Subianto’s more than 80,000 village cooperatives and drive economic growth to 8% from the current 5%, Indrawati told reporters.
The four banks are Bank Rakyat Indonesia, Bank Negara Indonesia, Bank Mandiri, and Bank Syariah Indonesia, Indrawati said.
"This enables the four banks to provide loans to village cooperatives at a low interest rate of 6%," she said.
The size of the fund placement is still being discussed within the government, but they will consider the size of total loan demand from the cooperatives, Febrio Kacaribu, a senior official at the ministry, told reporters separately.
The village cooperatives programme was launched last week, and the government has said that each of the cooperatives could apply for a loan to the state banks up to 3 billion rupiah ($183,655).
($1 = 16,335.0000 rupiah) (Reporting by Stefanno Sulaiman, Bernadette Christina; Editing by Martin Petty and Louise Heavens) - Reuters
