Micro credit program expected to help MSMEs: Hartarto

Micro credit program expected to help MSMEs: Hartarto

Coordinating Minister for Economic Affairs, Airlangga Hartarto, symbolically presents a micro credit certificate to an MSME actor in Medan on Thursday (September 9, 2021). (ANTARA/Evalisa Siregar/my)

Medan, N Sumatra (ANTARA) - Coordinating Minister for Economic Affairs Airlangga Hartarto has asked governors and mayors in North Sumatra to encourage the growth of the micro credit program (KUR) and the development of small and medium enterprises (MSMEs).

"The micro credit program created by the government with various facilities, such as low interest rates, is very helpful for MSMEs, especially in the midst of the COVID-19 pandemic," Hartarto remarked in Medan, the capital of North Sumatra Province, on Thursday.

He delivered the statement after symbolically presenting micro credit certificates to MSME customers of BNI, Bank Mandiri, BRI, and Bank of North Sumatra in North Sumatra during the 'Optimizing the Distribution of KUR Clusters in Improving Welfare and Economic Recovery' event.

As more MSMEs emerge and develop, they will encourage strong economic growth, the minister said.

In 2021, the government will disburse micro credit of Rp285 trillion (around US$20 billion), he informed. The figure is higher than in 2020, when it stood at Rp193 trillion (around US$135 billion), he added.

"The micro credit program with lower interest rates, which is only 3 percent, will be very helpful for entrepreneurs. I don't think moneylenders even dare to make interest rates so low like that to attract entrepreneurs to borrow,"he remarked.

For the cluster micro credit program, the government will not regulate allocations too much, Hartarto explained.

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For example, for the purpose of replanting palm oil, the loan can also be given to groups, he said. Up to a total of Rp5 billion (around US$350 thousand) can be provided in loans for each group, he added.

"Any entrepreneur can get it. The government has opened up (the opportunity for everyone), as wide as possible," the minister said.

In fact, for the first time, micro credit program recipients will be given a grace period of six months, he informed. There are loans of up to Rp100 million (around US$7 thousand) which will not require collateral, he said.

"For six months long you don't have to pay the interest. After that, you only pay 3 percent or the unsecured loan. It surely will be very helpful for MSMEs," he noted.

He emphasized that the government expects MSMEs to move forward again and help restore the economy in the midst of the COVID-19 pandemic.

"With MSMEs moving, the economy will live again, and can continue to reduce poverty," Hartarto remarked. 

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