The ceiling for KUR allocated to banks has already reached Rp176.53 trillion. With the additional ceiling, it will reach Rp198.73 trillion.
Jakarta (ANTARA) - The government is considering raising the ceiling for the microcredit program (KUR) after two banks proposed an additional ceiling of Rp22.2 trillion to cater to the skyrocketing demand for credit during the COVID-19 pandemic.

“The ceiling for KUR allocated to banks has already reached Rp176.53 trillion. With the additional ceiling, it will reach Rp198.73 trillion,” said deputy for micro economic and financial coordination at the Coordinating Ministry for Economic Affairs, Iskandar Simorangkir, during a teleconference in Jakarta on Thursday.

Earlier, one bank, which is a member of the Association of State-Owned Banks (Himbara), had reduced the ceiling for KUR by Rp12.2 trillion and the government had approved it, he informed.

However, the bank has asked the government to revise the ceiling due to high demand for KUR in July this year, he said.

"The bank has asked (to be allowed) to return its ceiling to Rp30 trillion," he added.

Another bank, which is the biggest distributor of KUR, has raised its ceiling by Rp10 trillion to Rp130.2 trillion, he revealed.

The government has given freedom to banks to channel KUR to other sectors than trade and production during the COVID-19 pandemic.

The Rp198.73-trillion ceiling for KUR exceeds the target of Rp190 trillion set for this year.

As of July, 2020, the realization of KUR had reached Rp89.2 trillion, which was channeled to an estimated 2.67 million debtors, with total outstanding of Rp167.87 trillion.

The amount of KUR channeled during the COVID-19 pandemic had dropped drastically from Rp18.9 trillion in March to Rp4.75 trillion in May this year. However, demand for KUR increased steadily to reach Rp13 trillion in July.

Nearly 42 percent of the KUR was channeled to the trade sector, 30 percent to the agricultural sector, 15 percent to the services sector, with non-performing loans (NPLs) remaining low at 1.07 percent.

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Translator: Dewa Ketut Sudiarta Wiguna/Suh
Editor: Rahmad Nasution
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