08 Sep 2020
Government Underwrites Working-capital Loans to Keep Economic Wheels Turning


The Minister of Finance (“MoF”) has issued Regulation No. 98/PMK.08/2020 to establish a government-guarantee scheme for working capital loans extended by the banking sector to large-scale businesses (“Reg. 98”).[1] The scheme is to be operated by Indonesia Eximbank, which will provide the loan guarantees, while PT Penjaminan Infrastruktur Indonesia (PII) will step in to provide additional support if Eximbank is in danger of exceeding its statutory guarantee limit.


Reg. 98 comes hard on the heels of MOF Reg. 71/PMK.08/2020, under which state-owned insurance companies Askrindo and Jamkrindo were drafted in by the Government to guarantee working-capital bank loans to micro, small, and medium businesses (MSMEs).


Both schemes are funded by the National Economic Recovery (NER) program, under which more than USD 45 billion has been allocated to mitigate the economic impact of COVID-19.




The requirements for participation in the Reg. 98 scheme are arranged based on the characteristics of the lender, borrower and loan, as described below:


  1. Lender Criteria


Eligible lenders comprise commercial banks that are rated as sound by the Financial Services Authority (Otoritas Jasa Keuangan / OJK). The lender is required to bear at least 40% of the risk pertaining to the loan, except in the case of loans to priority sectors, in which case the bank’s risk share may be as low as 20%.


  1. Borrower Criteria


The borrower must operate in the real or financial sector and have a net worth of more than IDR 10 billion (USD 678 thousand) and annual turnover of more than IDR 50 billion (USD 3.39 million). The crucial requirement is that the borrower must have been adversely affected by the COVID-19 emergency. In addition, the borrower must generate foreign exchange earnings, deposit foreign exchange earnings in Indonesia, increase national production capacity and/or have a minimum of 300 employees.


The government guarantee scheme is not available to borrowers on the National Defaulters Blacklist and those with non-performing loans as per 29 February 2020.


  1. Loan Criteria


For a loan to be eligible, it must be a new working capital loan or an increase in an existing working capital loan that was approved subsequent to the issuance of Reg. 38. In addition, the loan must not be syndicated and must be in an amount that is not less than IDR 10 billion (USD 678 thousand) and not more than IDR 1 trillion (USD 68 million) across all affiliates.


In all cases, a loan will only be eligible if it has a maturity of one year or less.


Guarantor’s Fee


Eximbank is entitled to charge a guarantor’s fee under the scheme, the amount of which is calculated based on the ceiling of the loan that is guaranteed. For loans of IDR 10 – 300 billion (USD 678 thousand – USD 20.3 million), the fee will be borne in full by MOF, while for those of IDR 300 billion to 1 trillion (USD 20.3 million - USD 68 million), the fee will be borne equally (50:50) by the borrower and MOF.


Cutoff Date


The scheme only applies to loans that are approved on or before 30 November 2021.


ABNR commentary


The Reg. 98 scheme could not have come at a better time for exporters as the economic impact of COVID-19 began to be felt in earnest. MOF has been careful to insert various safeguards to avoid moral hazard and prevent abuses. With the commercially orientated Eximbank in the driving seat, it is to be hoped that the scheme will provide deserving businesses with the support they need to keep operating at this critical juncture.


Contact us


Should you have any queries on the above or require legal advice as to how you can best protect your interests during this time of uncertainty, please contact the persons below, call us on +6221-2505125 or email us at


Mr. Emir Nurmansyah (

Mr. Nafis Adwani (

Mr. Agus Ahadi Deradjat (


[1] Peraturan Menter! Keuangan Republik Indonesia Nomor 98 /Pmk.08/2020 Tentang Tata Cara Penjaminan Pemerintah Untuk Pelaku Usaha Korporasi Melalui Badan Usaha Penjaminan Yang Ditunjuk Dalam Rangka Pelaksanaan Program Pemulihan Ekonomi Nasional


This edition of ABNR News and the contents hereof are intended solely to provide a general overview, for informational purposes, of selected recent developments in Indonesian law. They do not constitute legal advice and should not be relied upon as such. Accordingly, ABNR accepts no liability of any kind in respect of any statement, opinion, view, error, or omission that may be contained herein. In all circumstances, you are strongly advised to consult a licensed Indonesian legal practitioner before taking any action that could adversely affect your rights and obligations under Indonesian law.