The Government Will Distribute Rp 20 Trillion In Labor-intensive Investment Loans

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The Government Will Distribute Rp 20 Trillion In Labor-intensive Investment Loans

Friday, 28 Feb 2025

Airlangga Hartarto, the Coordinating Minister for Economic Affairs, confirmed that the government will provide a Labor-Intensive Investment Credit of IDR 20 trillion in 2025. This decision was made during a Coordination Meeting of the Policy Committee for Financing MSMEs, where the government agreed to launch a new financing scheme called Labor-Intensive Investment Credit. "The government is allocating sufficient budget for interest rate subsidies to ensure that the target distribution of this Labor-Intensive Investment Credit scheme reaches IDR 20 trillion by 2025. This shows the government's commitment to boosting growth and enhancing the competitiveness of the national labor-intensive industry while creating new jobs," Airlangga stated in Jakarta, as reported by Antara on Tuesday, December 24, 2024.

The Labor-Intensive Investment Credit scheme is specifically designed to support the modernization of machinery and improve productivity in labor-intensive industries. Through this scheme, industry players can access financing to upgrade their equipment and enhance production efficiency. The credit scheme offers various options, including loan amounts from IDR 500 million to IDR 10 billion, lower interest rates than commercial loans, and flexible loan terms ranging from 5 to 8 years. Airlangga explained that this credit scheme targets labor-intensive sectors such as ready-made clothing, textiles, furniture, leather goods, footwear, children's toys, and food and beverages.

To qualify for this credit, applicants must meet several requirements, including having a productive and viable business, at least 2 years of business experience, and a minimum of 50 employees, with the expectation of growth as production capacity increases due to machinery modernization.

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