The Ministry of Cooperatives and SMEs fully supports the policy of lowering the interest rate for the People’s Business Credit (KUR). This consideration is based on the belief that 56.7 million micro, small, and medium enterprises (MSMEs) in Indonesia will be able to support the national economy amidst the global economic slowdown.
"President Jokowi has stated that the KUR interest rate, specifically for the micro sector, could be further reduced to 9% next year," said Braman Setyo, Deputy for Business Development and Restructuring at the Ministry of Cooperatives and SMEs, in Surabaya on Thursday (03/09/2015).
Braman explained that this year, the KUR interest rate is set at 12%, after a significant decrease from 22% the previous year. If this policy is implemented, it will not only boost national economic resilience but is also expected to meet the Ministry's target of helping 1 million micro and small enterprises (MSEs) "move up a level."
"The target is to increase the number of MSEs to 800,000 by the end of 2016, up from 602,000 previously," Braman stated during his remarks at the Temu Mitra UMK Naik Kelas event at Hotel Mercure Surabaya. He explained that micro-enterprises are expected to grow into small enterprises, while small enterprises can advance to become medium enterprises, and so on.
As of September 3, 2015, KUR funds disbursed to the public had reached IDR 450 billion, since the program's launch on August 18. The total target is for IDR 30 trillion in KUR funds to be absorbed. "The distribution of KUR is progressing rapidly, and we have entrusted three banks—BRI, BNI, and Mandiri—to channel KUR to the MSME sector," said Braman, who also serves as Chairman of the Supervisory Board of Perum Jamkrindo.
On the other hand, he explained that the global economic slowdown, triggered by the potential increase in The Fed's interest rate, has led many countries to implement various monetary and fiscal policies. The Ministry of Cooperatives and SMEs is currently monitoring the impact of the weakening rupiah on MSME players. It is estimated that MSMEs using imported raw materials have experienced an average decrease in turnover of up to 15%.
However, Braman expressed optimism that by providing broad access to capital, the MSME sector will be able to survive and remain competitive, especially in facing the ASEAN free market at the end of this year. In addition to the distribution of KUR by the three banks, he emphasized that MSMEs also need capital access backup through guarantee schemes.
"It must be remembered that 40% of MSME problems relate to financing, and we need Perum Jamkrindo and Asippindo to provide guarantees for MSMEs," he concluded.
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