Small- and medium- sized enterprises (SMEs) in regional areas are expected to get better access to bank loans with the implementation of a new credit insurance scheme launched on Monday, Governor of Bank Indonesia Burhanuddin Abdullah said.
Burhanuddin said the new scheme, which was based on studies in several neighboring countries, would provide insurance for regional development banks (BPDs) in lending money to the SME sector.
"The intermediary role will hopefully function better since the risk loss due to bad loans could be kept at a manageable level," he asserted on Monday.
The new scheme involves a risk-sharing management among regional administrations, BPDs, and credit insurance firm PT Askrindo.
Under the scheme, the risk of a loan channelled to SMEs will be covered by the three parties, thus minimise the risk as there is more control and monitoring over the borrower from the parties.
