Give help to those who are productive and could inspire the public."
Jakarta (ANTARA News) - President Joko Widodo (Jokowi) has called on the financial industry to increase loan disbursement, especially people-based business loans (KURs), for small- and medium-scale enterprises (SMEs).

"I call on them to focus on small and micro businesses and fishermen for offering productive loans not consumptive, especially the BPDs (regional development banks)," Jokowi stated at the opening of an annual meeting of financial industry operators at the State Palace here on Friday.

The president has also called on governors to provide interest rate subsidy for KURs, which could be sourced from the regional budget to help boost the local economy.

The financial industry should intensify the promotion of KURs directly to the public, he added.

"We should not provide social assistance in the form of something, which is not productive. Give help to those who are productive and could inspire the public," Jokowi noted.

The president reiterated that loans for farmers and fishermen in regions should be increased to boost local economic development.

"Give it more to the productive sector, something which is related to production. For farmers (the aid) could be used to buy fertilizers and seeds. Prevent them from debt bondage. Protect them from loan sharks who lend money at exorbitant interest rates, while the banks interest rate is set at only 9 percent," Jokowi emphasized.

However, the president has called on banks to uphold its prudential nature to avoid non-performing loans.

The government has continued to lower the KUR interest rate in a bid to boost the productivity of SMEs.

In 2015, the government had cut the KUR interest rate from 22 percent to 12 percent, while in 2016, the rate was reduced further to nine percent.

President Widodo has targeted to cut the KUR interest rate to 7 percent in 2017 in a bid to encourage people-based economic activities, especially in regions.

(Reported by Bayu Prasetyo/Uu.S022/INE/KR-BSR/F001)

Editor: Priyambodo RH
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