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Government Investment Unit of Indonesia

Government Investment Unit of Indonesia

What Is the Government Investment Unit of Indonesia?

The Government Investment Unit of Indonesia is a provider of microfinance to small and medium-sized enterprises (SMEs) and is regulated by the country's Ministry of Finance. Otherwise called Pusat Investasi Pemerintah, the fund was set up after data from the Ministry of Cooperatives and Small and Medium Enterprises distinguished as numerous as 44.2 million SMEs needing government assistance. In 2017, It was allocated a revolving fund of 1.5 trillion Indonesia rupiah (IDR) to help upwards of 300,000 microenterprises.

Grasping the Government Investment Unit of Indonesia

The Government Investment Unit of Indonesia was laid out in 2006 as a sovereign wealth fund. It invested in different asset classes like debt and equity, major infrastructure projects across the country, and other direct investments. As referenced above, it is likewise referred to locally as Pusat Investasi Pemerintah.

A 2015 law required the fund to transfer Rp 18.3 trillion in assets to PT Sarana Multi Infrastruktur. This left the investment unit without a mission for quite a long time. In 2017, the Ministry of Finance reactivated the agency by requesting that it help SMEs.

Pusat Investasi Pemerintah currently works with nearby governments and distribution partners to get funds into the hands of small [entrepreneurs](/business person). In that capacity, it means to turn into a provider of microfinance to the people who need funding by doing the accompanying:

  • Dealing with the revolving fund
  • Distributing funds as per its vision
  • Fostering a microfinance program that illuminates and addresses the issues of the current society
  • Working with nearby governments
  • Teaching people about microfinance

Financing is accessible for microenterprises for as much as Rp 10 million or about $675. No collateral is required by the beneficiaries of these loans. As of June 2022, it has distributed Rp 20.79 trillion in loans to more than 2.8 million beneficiaries in excess of 500 distinct urban communities across Indonesia. This dollar amount means just more than $1.4 billion.

The latest figure for Indonesia's gross domestic product (GDP) for 2020 was $1.06 trillion. The country's economy shrunk by 2.1% that year.

Special Considerations

Microfinance in Indonesia

Indonesia has a large microfinance sector with north of 60,000 financial institutions that deal in this type of lending. Since it is a particularly necessary part of the country's economy, the country's central bank, Bank Indonesia, has a requirement that regardless of banks must set at least 20% of their lending portfolio to microfinance with an end goal to extend the sector.

PT Sarana Multi Infrastruktur

The assets and obligations that recently had a place with the Government Investment Unit currently live with PT Sarana Multi Infrastruktur, which is a special mission vehicle under the federal government's Ministry of Finance. PT SMI is permitted to finance infrastructure development in eight regions, including streets and scaffolds, transportation, oil and gas, telecommunications, squander management, power, water system, and drinking water supply.

Features

  • However much Rp 20.79 trillion in loans has been dispensed to almost 2.8 million beneficiaries.
  • Despite the fact that it initially invested in infrastructure, the fund's assets and obligations were transferred to PT Sarana Multi Infrastruktur in 2015.
  • The fund gives microenterprises financing up to Rp 10 million with next to no collateral from the borrower.
  • Otherwise called Pusat Investasi Pemerintah, it was laid out in 2006 as a sovereign wealth fund.
  • The Government Investment Unit of Indonesia gives microloans to SMEs in Indonesia.