State-owned lender Bank Rakyat Indonesia (BRI), in cooperation with ride-hailing service provider Grab, has launched a low-interest loan facility for the latter’s drivers and merchant partners who have been impacted by the COVID-19 pandemic.

Under the program, Grab’s drivers are eligible for a low-interest loan worth up to Rp 5 million (US$336) with a 24-month tenure. BRI is also giving leeway to the drivers by freeing them from payment obligations for the first three months.

Besides drivers, merchants who operate through the GrabFood and GrabKios services, especially those with no access to bank loans, will be eligible for a microcredit program (KUR) worth up to Rp 50 million. The interest rate stands at 6 percent for a maximum 36-month tenure.

“We welcome BRI’s support in providing soft loans. We hope that this program can ease the burden on our partners,” Grab Indonesia’s managing director Neneng Goenandi said in a press statement on Thursday.

Drivers who open accounts in the bank will also get insurance for accidents to the amount of 250 percent of their current account or a maximum coverage of Rp 150 million.

For the first phase of the program, a quota of 1,000 Grab driver partners in Greater Jakarta will be able to access the soft-loan facility.

The partners, however, will still have to meet the minimum requirements for their average earnings and the length of partnership with Grab to access the loans.

BRI launched a similar program with the Jakarta-based ride-hailing service provider Gojek earlier this week.

The number of active Gojek and Grab users declined 17 percent throughout March as a result of the government’s large-scale social distancing restrictions (PSBB), according to a Statqo Analytics report, leading to a reduction in drivers’ income.

Meanwhile, the country’s small and medium enterprises (MSME) saw a 30 to 35 percent sales decline in February and March, according to Indonesian MSME Association chairman Ikhsan Ingratubun.

BRI consumer director Handayani said the company was committed to helping MSME and informal workers who were hit hard by the health crisis.

“The low-interest loan program is part of our commitment to supporting the livelihoods of drivers and merchants,” she said.