Indonesia's finance minister said 900 billion rupiah (S$90.7 million) in subsidies is needed to put into effect a government program to have state-controlled banks cut interest rates on micro loans to 12 pct from 24 percent.
Finance Minister Bambang Brodjonegoro told reporters on Friday the government targets to deliver 30 trillion rupiah in micro loans in 2016.
The subsidy will come from the state budget.
Earlier this month, the government said it wanted state-controlled banks to halve lending rates for small businesses to support growth in Indonesia, with some help from government subsidies, and the banks agreed.
The rate cut will take effect July 1.