The government of Indonesia has provided grants for which many of the country's businesses are eligible. Most of the businesses which are eligible for Indonesian government grants are small and medium enterprises (SMEs); however, other qualifying businesses may also claim them.

Government Grants in Indonesia

Definition of Government Grants

A government grant is a financial provision given by national, provincial or state, or local government authorities for any of various reasons and to any of eligible people or entities. It is effectively a gift from the government. This is because the money provided via a government grant is not to be repaid. There are no fees, loan policies, interest rates, subsidies, or revenue-sharing policies which are attached to a government grant. Grants allow many entities to pursue projects and business activities which they otherwise would not have; they also provide people who receive them with additional financial stability.

Purposes of Government Grants

Certain government grants are intended to help entities which receive them to improve their facilities. These entities are usually those which have the function of public service and do not have sufficient funds to improve their facilities without external assistance. Grants often provide funds for the repair of damages, reinforcement of buildings, increase of environmental sustainability of the premises, or construction of additional structures to serve the needs of the entity’s clients.

There are also government grants which provide funds for educational material. Such grants are usually given to schools and universities. Other educational grants support those who are economically disadvantaged and allow them to receive an education in the same way as do their more affluent counterparts.

Some grants exist which facilitate the ability of national, local, or private entities to prepare for emergencies. The funds provided through such grants could be used to pay for equipment that would mitigate the effects of emergencies or pay the salaries of emergency workers. Grants related to emergencies increase the level of safety and security in any given community.

Some governments also offer grants which support social programs. These social programs may contribute to environmental preservation, educational advancement, or assistance of people with disabilities, among others. Through the issuance of such grants, a government proves to the citizens of the country that it cares for all who live in the country.

Academic research and artistic endeavors can also be supported through government grants. Governments provide grants in these two areas because a country which produces high-quality products in such fields will be held in higher esteem throughout the rest of the world. Therefore, these grants are used by governments as ways to improve the country’s global reputation and image.

Grants Offered by the Indonesian Government

The government of Indonesia offers several grants for which certain businesses are eligible. The majority of Indonesia’s economic growth relies on the contributions of grassroots-level small and medium enterprises (SMEs). Therefore, it is obvious that the SMEs of Indonesia have tremendous importance to the country’s long-term and sustainable economic growth. For this reason, the Indonesian government intends to help the country’s SMEs improve their productivity levels and experience growth rates similar to those of large enterprises. The Indonesian government also works with certain non-profit organizations so that it can issue appropriate grants to SMEs across Indonesia. One of these is the Credit for Businesses (Kredit Usaha Rakyat). This grant provides credit, working capital, and investment financing plans which are specifically tailored to serve the financial needs of SMEs across Indonesia. The Ministry of Cooperative and SME has also created the Startup Incubator Program. This program is intended to promoting local entrepreneurship throughout the country and is connected to several other SME-related grants provided by Indonesia’s government.