The Japan International Cooperation Agency (JICA) will assist the Indonesian government in conducting a study on the determination of People’s Business Credit (KUR) interest rates.
"They can help analyze the KUR interest rate determination set by banks," said Deputy Coordinating Minister for Economic Affairs in the Field of Economic and International Trade Cooperation, Rizal Afandi Lukman, in Jakarta, Friday (8/9).
According to him, JICA can provide various types of assistance to support the development of microcredit in Indonesia. "JICA can provide any assistance, but the government is directing them to study why KUR interest rates are quite high and explore the possibility of lowering them," Rizal said after a meeting with JICA Jakarta Representative Chief, Koki Hirota.
Currently, he explained, microloans above Rp20 million have an interest rate of 13%, while loans below Rp20 million are at around 22%. However, banks in Indonesia are reluctant to lower KUR interest rates below 22% for loans under Rp20 million.
JICA will provide expert assistance to analyze why this situation occurs. The government expects recommendations to help reduce KUR interest rates.
In addition to assisting with the KUR interest rate study, JICA will also provide loans to banks distributing KUR. "KUR banks can obtain soft loans, which will reduce KUR interest burdens for micro-entrepreneurs," he said.
A lower KUR interest rate will result in more competitive prices, business growth, and higher income for micro-entrepreneurs. "The benefits will be directly felt by micro-entrepreneurs," he added.