Faisal Basri Reveals the Oddities of BRI and Bank Mandiri Lending to MSMEs

JAKARTA - Senior Economist, Faisal Basri, assessed that there were oddities of Bank BRI and Mandiri lending. He admitted that he didn't believe that these two state-owned banks could distribute loans worth IDR 20 trillion in a short period.

On June 25, through the Ministry of Finance, the government agreed to place funds worth IDR 30 trillion in state-owned banks, specifically for BRI and Mandiri, each with IDR 10 trillion.

These state-owned banks will be assigned to provide restructuring and interest subsidies for the people who most affected by the COVID-19 pandemic. Particularly the micro, small, and medium enterprises (MSMEs) sector. These funds have to be returned by the government.

"He said that the ministry should not have its vision, which is used by the president's vision. Now, Erick Thohir has his vision. Now he is increasing the role of BUMN in GDP by 30 percent, so everything is given to BUMN. Try to check for yourself, do you believe that BRI and Mandiri can distribute credit for MSMEs as much as IDR 20 trillion in an instant?" he said, in a virtual discussion, Thursday, August 13.

According to Faisal, there was something wrong with this credit distribution. With a fund of IDR 20 trillion, credit disbursement is given to thousands of MSMEs. But amid a crisis like this, credit can't be distributed to new customers.

Furthermore, Faisal assessed that credit channeling by state-owned banks or the Association of State-Owned Banks (Himbara) to tens of trillions of MSMEs is cannibalization. It's because of the recipients of credit are MSMEs that have previously received it. Thus, the number of MSMEs that received credit flows did not increase.

If this is the case, lending to MSMEs will be ineffective. It's because the government hopes that they could equally distribute the credit channels to MSMEs to revive the real sector after being hit by the COVID-19 pandemic.

"So, I say as if the distribution of credit is increasing, but not effective because that's the same person. I can guarantee it. I bet. Please put me in prison if I'm wrong. Cannibalism has happened, not will happen. It's great that in a month, there are 100 thousand new customers of UMKM who are having problems with COVID-19," he said.

Faisal said that the debtors would want a better scheme. The government and others subsidized the interest. According to him, the government had been lied to by state-owned banks in providing this credit.

"So to be true, the government is not sensitive. Now, this is an incorrect way to raise BUMN. The president should have reprimanded Erick Thohir," he said.

On the other hand, Faisal assessed, Erick Thohir was too pushy to give credit for MSMEs to Mandiri because this is not the core business of the bank.

"We don't want to build state capitalism. We want to build it together. Was Mandiri told to distribute BUMN credit to MSMEs? It doesn't have any competence. It's cannibalism. Please check," he said.

Previously, Deputy Minister of BUMN II Kartika Wirjoatmodjo detailed the realization of credit disbursement from the placement of government funds of IDR 43.5 trillion as of July 22, 2020. 518.797 customers got the credit.

President Director of BRI, Sunarso, admitted that he had disbursed loans from the 'government piggy bank' as much as IDR 24.93 trillion. 583.517 customers got the credit. The target is that the lending should reach IDR 30 trillion, or three times the total government funds in companies.

Then, President Director of Bank Mandiri, Royke Tumilaar, said that the company had disbursed loans from the placement of government funds as much as IDR 16.2 trillion to 27,854 customers.

Just like BRI, the management of Bank Mandiri is also committed to channeling loans three times the amount of government savings. It means that the credit expansion target from the placement of government funds alone reaches IDR 30 trillion.

Until this news was written, VOI had tried to confirm Faisal's assessment regarding the cannibalization carried out by BRI and Bank Mandiri to their respective management. However, there has been no response from the two state-owned banks.