JAKARTA - The decline in transfer funds to regions (TKD) encourages the Regional Development Bank (BPD) to strengthen its role in financing development and maintaining regional economic growth.
Asbanda Chairman Agus H. Widodo said that the BPD needs to transform from an administrative role to a more active intermediary institution.
"BPD must be able to manage the flow of funds as well as drive the regional economy," he said.
He assessed that financing innovations such as regional loans need to be optimized while still prioritizing the principle of prudence.
On the other hand, Central Java Governor Ahmad Luthfi emphasized the importance of investment as the main source of financing for regional development.
According to him, the contribution of the central government budget is not enough to support the needs of regional development.
Bank Jateng President Director Bambang Widiyatmoko added that the trend of declining TKD has been going on since 2020, both in terms of nominal and percentage.
For this reason, he encouraged the strengthening of collaboration between BPDs, including through syndicated financing for infrastructure projects.
"Synergy between the BPD will increase the financing capacity of regional strategic projects," he said.
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