JAKARTA: The government has confirmed that the People’s Business Credit (KUR) funds for investment financing in the plantation and crop sector cannot be extended, due to the lengthy repayment period of up to 13 years.
Choirul Djamhari, Deputy for Business Development and Restructuring at the Ministry of Cooperatives and SMEs, explained that the guarantee for KUR in this sector has been increased from the previous 70% to 80%.
"The guarantee for this sector was raised because banking institutions face high risks. However, in the case of plantations, the credit term extends up to 13 years," he said today.
Several key improvements in KUR disbursement were implemented by the government through the third KUR addendum on September 16, 2010. With the increased guarantees and extended credit terms for the plantation sector, the government hopes that micro, small, and medium enterprises (MSMEs) will receive better access to banking services.
There have been numerous complaints from prospective borrowers, particularly from the plantation and agriculture sectors. These potential debtors face challenges in accessing banking services because their businesses are considered vulnerable to losses, largely due to agriculture’s heavy dependence on weather conditions.
By involving 13 Regional Development Banks (BPD) in their respective regions in the KUR program, Choirul is optimistic that the investment and financing needs of the plantation and agriculture sectors can be met. He noted that before signing the third addendum, the BPDs had already been working hard to boost credit disbursement in their regions, and they are also expected to enhance their linkage programs with microfinance institutions (LKM).
(source: bisnis.com)