Ministry of Finance to Issue Diaspora Bonds on November 2020, Minimum Order of IDR 5 Million

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Illustration of rupiah and US dollar banknotes

The Ministry of Finance plans to issue state debt securities (SUN) specifically for overseas diaspora or diaspora bonds by the end of 2020. It is expected that the issuance can be carried out around November 2020 if the relevant ministry ministries are ready.

This Diaspora bond has become one of the government’s moves to meet the funding needs of Covid-19 countermeasures in Indonesia.

Later, the results of the issuance of diaspora bonds will be used to fill the health budget, social safety nets, and assistance to the MSME sector during the Covid-19 pandemic.

Director of State Debt Directorate General of Financing and Risk Management of the Ministry of Finance, Deni Ridwan, explained that Indonesia was late in issuing a diaspora bond instrument to assist with the funding needs of the state budget. Therefore, the government considers it necessary to immediately try the new instrument because it has been reviewed since the beginning of 2019.

He said the state debt securities (SUN) were only intended by Indonesian people who were abroad and foreign citizens (foreigners) who have national descent.

The plan to issue the diaspora bond, said Deni, will be denominated in the rupiah by considering transactions through the electronic system, aka e-SBN. Where payments are made through banks, post offices, to perception institutions that most can only use Garuda currency.

Deni said diaspora bonds cannot be bought by Indonesian diplomats who work abroad. Therefore, for the Indonesian diaspora and foreign diaspora of Indonesian descent must have an Indonesian society card abroad (KMILN).

Diaspora bonds can be ordered a minimum of IDR 5 million and a maximum of IDR 5 billion. This state security will have a tenor of three years with the coupons offered are fixed-rate and non-tradable.

At present, there are 14 companies that have become diaspora bond piloting distribution partners. That includes eight banks, namely BCA, Maybank, BRI, BNI, CIMB Niaga Bank, Panin Bank, Bank Mandiri, and BTN. Then three fintech companies, namely Tanamduit, Bareksa, and Invisee. The following are three securities, namely Bahana Sekuritas, Mandiri Sekuritas, and Trimegah Sekuritas Indonesia.

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