The Indonesian government’s decision to place Rp200 trillion from the Budget Surplus Fund (SAL) into domestic banks will only have a significant economic impact if the funds are directed toward productive financing mechanisms supported by well-managed and calculated risk-taking.

This statement came from Fakhrul Fulvian, Director of Insight at the Kadin Indonesia Institute and Chief Economist at Trimegah Sekuritas. According to him, state funds should act as a catalyst for courage, encouraging financial institutions to channel financing into the real sector — not merely strengthening bank liquidity without productive direction. He also rejected the notion that Indonesia is facing a liquidity shortage.

“We don’t lack money; what we lack is the courage to deploy it wisely. If these funds only sit in deposits or reverse repos, the impact will be minimal,” said Fakhrul in his note, quoted Wednesday (October 8, 2025).

Regarding fund distribution, Fakhrul argued that collaboration with non-bank financial institutions willing to take measured risks is essential.

Therefore, he emphasized expanding fiscal stimulus into a risk-sharing ecosystem, involving the government, banks, guarantee agencies, and the venture capital industry.

He noted that Indonesia’s financial system has long been dominated by cautious banks, while equity-based financing institutions such as venture capital remain underdeveloped.

“Venture capital can serve as the courage layer in our financial system. Banks maintain liquidity, the government assumes part of the risk, and venture capital channels funds into innovative sectors,” Fakhrul explained.

For this reason, he argued that the venture capital industry should not be seen as a small player, but rather as the missing middle linking fiscal policy and business growth.

He stated that venture capital is crucial for high-growth sectors that are not yet fully bankable, including modern agriculture, green industries, logistics, and regional manufacturing.

“If even a small portion of the Rp200 trillion is allocated to collaborative schemes with venture capital, the multiplier effect would far exceed that of conventional lending,” said Fakhrul.

Fakhrul also highlighted the need for regulatory reforms to make venture capital a formal development channel. He proposed that the Financial Services Authority (OJK) adopt a tiered licensing model, allowing the establishment of micro venture funds with initial capital between Rp5–10 billion, enabling the industry to grow across various regions in Indonesia.

“Our regulations still treat venture capital like a regular financial institution. In reality, venture capital is the engine of courage. If licensing becomes flexible and tiered, the ecosystem can grow from the ground up,” he emphasized.

He added that a healthy venture capital ecosystem could also repatriate Indonesian funds currently parked overseas.

“If the risk framework is transparent, diaspora and domestic investors will have the confidence to bring their capital back home,” he said.

Singapore’s Success

Fakhrul cited several countries that have successfully used venture capital as an extension of fiscal policy.
For instance, Singapore established Heliconia Capital under Temasek Holdings to finance the expansion of national mid-sized enterprises.

South Korea, on the other hand, created the Growth Ladder Fund, a state-backed fund channeled through private venture capital to support startups and tech-based SMEs.
Meanwhile, France’s Bpifrance distributes public funds through co-investment mechanisms with private sectors and regional development banks.

“Developed nations successfully combine public funds with market-driven courage — something we have yet to achieve,” Fakhrul noted.

He concluded that Indonesia could develop its own version, and the Rp200 trillion fund allocation could serve as the starting point for a venture-based development framework.