Indonesian govt set to channel Rp110 trillion in people`s business credits

Indonesian govt set to channel Rp110 trillion in people`s business credits

Photo document of number of bank employees explained the program's business credit (KUR) to customers in Donohudan, Boyolali, Central Java. (ANTARA/Aloysius Jarot Nugroho)

Jakarta (ANTARA News) - The government has set itself the target of channeling Rp110 trillion in peoples business credits (KUR) to small and medium enterprises (SMEs) across Indonesia this year.

The annual interest rate of the loans was set at 9 percent during a meeting of the policy committee on January 20, according to the Deputy for Financing Section to the Cooperative, Small and Medium Business Minister, Braman Setyo, on Saturday (Jan. 21).

The meeting was attended by the Coordinating Minister for Economic Affairs, Darmin Nasution, State Enterprises Minister Rini Sumarno, Chief of the Board of Commissioners of the Financial Service Authority (OJK) Muliaman D. Hadad, the president director of the state-owned insurance company Perum Jamkrindo, Diding S Anwar, and representatives of KUR partner banks.

Setyo confirmed that 81 percent of the loans will be distributed to micro businesses, 18 percent to retail businesses and 1 percent to Indonesian migrant workers.

KUR will be distributed this year by 38 financing institutions, including 33 banks, 4 non-bank financial institutions and one cooperative, he said.

"There was also a proposal to appoint five more financing institutions that are involved in financial arrangements for Indonesian migrant workers during the meeting. If the proposal is approved, the number of KUR financing institutions will increase to 44," he added.

Two state-owned insurance companies, Perum Jamkrindo and Askrindo, were also appointed by the government as KUR insurance partners.

(Reported by Hanni Sofia Soepardi/Uu.S012/INE/KR-BSR/H-YH)