We have the off-taker, the buyer guarantees, and the showroom to sell the products as well. It means that the whole cycle is transparent and financial institution, such as a bank, is confident to lend its moneyJakarta (ANTARA) - President Joko Widodo (Jokowi) urged his staff to multiply and expand the cluster of the people's business credit (KUR) program to various sectors to increase sales and the micro, small, medium enterprises (MSMEs) business model.
"I am happy that we have the KUR cluster. It must be clustered," he stated at the handover of the KUR Cluster at the State Palace in Jakarta, Monday.
The president also expressed his excitement over the development of various KUR clusters, such as the development of a horticulture cluster involving MSMEs from Islamic boarding schools. This cluster model also helps to develop the MSME horticulture business with support from off-takers or buyer guarantees in purchasing the products.
"I heard there was an Islamic boarding school that was able to reach billions from the horticulture sector. Their vegetable products were bought and sold through businesses with a large network. The off-taker of the purchase is clear," he noted.
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Another example is a KUR cluster for MSME in the coffee sub-sector. He noted that the presence of these various clusters also helps financing institutions, such as banks, to extend loans, as the eligibility of MSMEs has increased.
"We have the off-taker, the buyer guarantees, and the showroom to sell the products as well. It means that the whole cycle is transparent and financial institution, such as a bank, is confident to lend its money," the president remarked.
In addition, he stated that the KUR cluster will support the MSME business model since the distribution of financing will focus on certain MSME sectors. That way, MSMEs can expand their business not only in the upstream sector but also downstream.
"Later on, the coffee sub-sector will not only sell raw materials but also semi-finished goods or finished goods. I have seen a lot of them in the regions, and the packaging is quite good," he noted.
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The head of state is optimistic that the livestock and fisheries sectors would also have a KUR cluster in order to boost food productivity.
"If these KUR cluster models are multiplied, they can later reach the breeders, both meat and eggs and also fishermen. We need to multiply the cluster," he emphasized.
Meanwhile, Minister of Cooperatives and SMEs, Teten Masduki, stated that until now, the KUR cluster has realized Rp4.8 trillion for 1.39 million debtors. The KUR cluster has disbursed financing to business groups, with a ceiling of up to Rp500 million per business owner.
"The KUR cluster is also provided to MSMEs in groups, which are integrated from upstream to downstream, connected with off-takers to reduce the potential for bad loans. This will help banks to carry out the monitoring process," he added.
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Translator: Indra Arief P, Resinta S
Editor: Fardah Assegaf
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