"I ask for an increase in capital assistance through the distribution of People's Business Credit (KUR) with a special KUR scheme based on business groups or clusters, through the KUMKM Revolving Fund Distribution Agency (LPDB)," Amin said while attending the inauguration of PLUT-KUMKM Semarang district, Semarang, Central Java, on Tuesday.
In a press release received in Jakarta the same day, the Vice President emphasized that MSMEs are among the government's priorities that need to be empowered so they will continue to be given full assistance.
KUR financing is a solution for MSMEs, especially those who have not been included in conventional banking services, to increase their business capital, he explained.
The Vice President also expressed the hope that Indonesia would increase its entrepreneurship ratio, push financial inclusion, and assist MSME exports, as well as help digitalize 30 million MSMEs.
"We hope that in 2024, Indonesia will be able to increase the entrepreneurship ratio to 3.95 percent, increase inclusion of financial access to reach 90 percent, create 30 million MSMEs that go digital, and increase the contribution of MSME exports by 21.6 percent,” he said.
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He also emphasized the importance of stakeholder collaboration for advancing entrepreneurship through the presence of PLUT-KUMKM in various regions.
The Vice President then invited the public to introduce entrepreneurship from an early age through education.
The Indonesian Employers Association (Apindo) earlier said that only 30 percent of MSME players in Indonesia are digitally literate.
"Of the 64 million MSMEs in Indonesia, only around 19 million MSMEs are digitally literate. Thus, there is still a lot of space that must be pushed by the government so that MSMEs can get easy and cheap credit access," head of Apindo's economic policy analyst committee, Ajib Hamdani, said during the “IDX Channel Market Review” event on Friday.
According to Hamdani, MSME players have welcomed the government's commitment to increasing the KUR ceiling from around Rp373.17 trillion to Rp460 trillion in 2023.
As of August 2022, the disbursement of bank loans has reached Rp6,155 trillion, but loans disbursed to MSMEs have only reached Rp1,214 trillion, or 19.7 percent of the total.
MSMEs, which account for 60 percent of the country's gross domestic product (GDP), need to get more credit from banks, with the help of programs such as KUR.
To make the KUR program more effective, the government must encourage MSME players to create a business ecosystem with a more detailed classification, such as a business ecosystem based on the commodity produced or processed.
"The currently existing KUR clusterization system is not sufficient. It is still too macro. Therefore, more micro techniques are required so that MSME players have clustering per commodity," Hamdani said.
To this end, an evaluation of the feasibility of MSMEs to obtain KUR that will be conducted by banks can be done more easily.
"Clustering per business sector, per commodity, becomes very important because all risks become more measurable. We hope that the NPL (non-performing loans) of KUR can go down, even below the NPL of bank credit, in general," he added.
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Translator: Rangga P, Azis Kurmala
Editor: Suharto
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