Minister Nasution opens up on hard-to-achieve KUR disbursement target

Minister Nasution opens up on hard-to-achieve KUR disbursement target

Coordinating Minister for Economic Affairs Darmin Nasution at an event at the Smesco Building, Jakarta, on Wednesday, Oct 16, 2019. (ANTARA/Astrid Faidlatul Habibah/sh)

We have to encourage the establishment of groups or clusters of micro-, small-, and medium-scale businesses. That is the challenge
Jakarta (ANTARA) - Coordinating Economic Affairs Minister Darmin Nasution conceded to the difficulty in achieving the 60-percent target of the Micro Credit Program (KUR) disbursement for the production sector set in 2019.

"In 2017, I set (the target) at 40 percent, and in 2018, at 50 percent. This year, the target was set at 60 percent, but it might not be reached," Nasution remarked here on Wednesday.

The minister believed that one main factor behind the failure was the lack of interest among banks to disburse loans since individuals constituted most applicants for KUR in the production sector.

"Banks are less interested as compared to (disbursing loans) for a group of 100 people," he noted.

Hence, Nasution urged micro-, small-, and medium-scale businessmen to establish a cluster in the production sector to ease the process of obtaining a micro loan.

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"We have to encourage the establishment of groups or clusters of micro-, small-, and medium-scale businesses. That is the challenge," he stated.

Furthermore, the involvement of private companies holds significance to support the establishment of the clusters by offering trainings to improve the quality and value of their products.

The ministry's Deputy for Coordination of Macro Economy and Finance Iskandar Simorangkir stated that KUR disbursement from August 2015 to August 2019 had reached Rp435.4 trillion for 17.5 million debtors with non-performing loans maintained at 1.31 percent.

KUR disbursement in 2019 is targeted to reach Rp140 trillion, of which 60 percent will be disbursed to the production sector. However, until August 31, only Rp102 trillion had been disbursed to 3.4 million debtors.

"KUR disbursement for the production sector until August 2019 had stood at 47 percent," he stated. Related news: BRI posts Rp16 trillion consolidated profit, 8.1 percent growth

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