Indonesia’s Finance Minister, Purbaya Yudhi Sadewa, has allocated Rp2 trillion (about $119.1 million) to provide export financing for the textile and furniture sectors, with the funds to be channeled through the Indonesia Eximbank (LPEI).
“We have allocated Rp2 trillion for textile and furniture companies. They can access this through LPEI at a 6% interest rate,” Purbaya said on Tuesday.
Purbaya noted that LPEI’s financing for the sector currently stands at just Rp200 billion, and furniture businesses have called for the overall support to be raised to Rp16 trillion.
The initiative seeks to boost the competitiveness of Indonesian products in global markets.
At present, the minister has approved the plan with a financing limit of Rp2 trillion.
The financing incentive proposal was presented during a meeting between the Indonesian Chamber of Commerce and Industry (Kadin Indonesia) and the Ministry of Finance in Jakarta on Friday.
Kadin Indonesia Chairman Anindya Bakrie stated that business leaders suggested a range of measures, from incentive programs to deregulation, to bolster the furniture sector.
Kadin Indonesia highlighted that while global furniture exports are estimated at approximately $300 billion, Indonesia currently captures only around $2.5 billion of that market.
This highlights that Indonesia’s furniture industry accounts for only a modest share, despite the substantial opportunities offered by global markets.
Additionally, Abdul Sobur, Chairman of the Indonesian Furniture and Craft Association (HIMKI), expressed the association’s expectation for tangible government support, such as lower interest rates or access to affordable financing.
Alongside financing and industrial development strategies, industry stakeholders also suggested diversifying export markets, as around 60% of Indonesia’s furniture exports are currently directed to the United States.
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