JAKARTA, Sept 25 — Indonesia's Finance Ministry has deposited US$2 billion (RM8.15 billion) for loan repayments due today into a holding account at a state bank, and said they can be released once it is verified that the loans were used as intended for a village cooperative scheme.
According to a government document seen by Reuters and two sources, the bank loans are part of a complicated financing scheme for the "Red and White" village cooperative programme, an initiative of President Prabowo Subianto to build tens of thousands of cooperatives to stimulate rural economies.
Under the scheme, the government will repay loans taken from state banks by a state-owned firm building the cooperatives.
The focus on the repayments comes after analysts and rating agencies have expressed concern about pressure on the budget from some costly government programmes, with the complicated structure also creating a potential "bad loan" risk for the state banks.
A Finance Ministry decree seen by Reuters showed that 37.7 trillion rupiah (RM8.57 billion) was transferred to an escrow account at Bank Mandiri but "could not yet be recognised as repayments" until the scheme's requirements are met.
That matched details provided by two sources with knowledge of the transaction, but who were not authorised to speak publicly.
Finance Ministry spokesmen and Bank Mandiri did not immediately respond to a request for comment.
Yesterday, Finance Minister Suahasil Nazara said the government would make the repayments once it verified the funds were used as intended.
"This has been budgeted, the fund is ready, we will definitely pay. There must be verification for what have been built and how many," he said.
Four state banks lend US$13.6 billion
Under the scheme, state company PT Agrinas Pangan Nusantara is building 80,000 stores in villages across the vast archipelago, funded by 240 trillion rupiah (RM54.59 billion) of low-interest loans with six-year tenures from four state banks.
The lenders are Bank Rakyat Indonesia, Bank Negara Indonesia, Bank Mandiri, and Bank Syariah Indonesia. The loans will be repaid by the government, rather than Agrinas Pangan, and eventually ownership of the cooperatives will be transferred to local communities.
Prabowo has said he wants the cooperatives to sell government-subsidised products, such as fertilisers and cooking gas, buy local produce, and offer cheap loans to villagers.
Bank Mandiri and BNI have each disbursed 55 trillion rupiah (RM12.51 billion) to Agrinas Pangan, making up three per cent and six per cent of their respective gross loan. In a note on Tuesday (September 22), Fitch Group research firm CreditSights said that it did not detail lending by the other banks.
While the risk of non-payment is low, it noted that administrative delays are possible and could cause the loans to be considered underperforming and "could trigger...temporary provisions and some earnings drag."
CreditSights added that the long-term sustainability of each individual cooperative remained to be seen, highlighting a number of concerns about the scheme including a top-down rollout with a one-size-fits-all operating model, limited feasibility testing, and reports of poor site selections for some cooperative buildings.
The government targets constructing 35,000 cooperatives this year, with the rest to be built in 2027. As of today, 26,074 cooperative stores have been built, according to a government monitoring dashboard.
