Government prepares new micro business loan for production sector

"We are designing this to increase productivity," Darmin Nasution said.
Jakarta (ANTARA News) - The government is preparing a new micro business loan (KUR) scheme to accelerate the distribution of loans to the production sector, Coordinating Minister for Economic Affairs Darmin Nasution stated.

"We are designing this to increase productivity," Nasution noted after a meeting to discuss KUR here on Friday.

Nasution explained that the new scheme will focus on small plantations, animal husbandry, and the fishery sector managed in clusters and will work in synergy with the current KUR scheme.

For the plantation business, the government will set a seven percent interest rate for the loan and is expected to boost the productivity of palm oil, rubber, and coconut as the countrys main commodities.

To boost farming, the new KUR scheme is expected to support cattle and chicken farming to realize food sufficiency.

"We believe that the targeted disbursement of KUR could help more farmers, fishermen, and craftsmen to improve their productivity," Nasution noted.

The government has set the KUR credit ceiling at Rp25 million to Rp500 million for each member in a group.

The Financing Policy Committee for small- and medium-scale enterprises will set the KUR credit ceiling for 2018, by taking into account the recommendation of the Financial Service Authority.

In addition to the new special KUR, the Financing Policy Committee has made some changes in the KUR terms that will be enacted as a Coordinating Minister for Economic Affairs Regulation.

Among the changes are the credit ceiling for micro KUR for the production sector at a maximum of Rp25 million per planting season or one production cycle without limitation on accumulated credit ceiling.

In addition, it stipulated the total accumulation of credit ceiling for micro KUR in the non-production sector, which was set at Rp100 million, additional business group eligible for the loan, and multi-sector KUR scheme to accommodate the disbursement for more than one sector, post-harvest payment mechanism, and grace period.

Other terms are on-cost structure for the placement of migrant workers, KUR for optimization of the Joint Business Group, and KUR for communities in border area.(*)

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