Airlangga: Capai KUR Distribution IDR 177.54 Trillion As Of September 30

Coordinating Minister for Economic Affairs Airlangga Hartarto said that the distribution of People's Business Credit (KUR) was recorded to have reached Rp177.54 trillion as of September 30, 2023.

"In terms of quantity, the realization of KUR distribution until September 30, 2023 has reached Rp. 177.54 trillion or 60 percent of the 2023 KUR distribution target which has been adjusted by Rp. 297 trillion," Airlangga said at the Coordination Meeting of the Financing Policy Committee for MSMEs, quoted by ANTARA, Saturday, October 7.

KUR has been distributed to 3.21 million debtors with debit balance positions as of September 30, which amounted to IDR 528 trillion which was given to 42.96 million debtors.

In terms of quality, the value of the Non-Performing Loan (NPL) KUR is still maintained at the level of 1.63 percent. This year's KUR policy is directed to encourage the expansion of access to financing for Micro, Small and Medium Enterprises (MSMEs) who have never received KUR.

This is reflected in the recipients of KUR which are dominated by new debtors, namely as many as 79 percent of the total KUR recipients. In line with the application of tiered KUR interest rates, KUR debtors who rose the financing class in an increasing trend of 52 percent of the total KUR debtors have been in decline.

The majority of KURs are distributed to the production sector by 55.46 percent, with the largest sector being financed, namely the agricultural sector at 30.4 percent. This is in line with the government's priority program in order to deal with the impact of El-Nino which poses a threat to national food security.

To accelerate the distribution of KUR in the agricultural sector, the government has changed policies to exemption from the number of access to KUR and the absence of tiered interest for agricultural sector KUR debtors with a loan amount of up to Rp100 million.

Airlangga explained that there were other policy changes such as additions and changes to the criteria referred to by investment credit or commercial working capital that were excluded from being able to access KUR. In addition, there is an affirmation of the provisions for the graduation of KUR debtors with a ceiling below Rp. 10 million which accesses KUR again with a loan amount above Rp. 10 million and an interest of 6 percent.

"The relaxation of the Micro KUR (loans of a maximum of Rp. 100 million) to KUR debtors in the agricultural sector who have limited land shows the Government's attention to small-scale farmers who need access to low-cost financing as production capital. Don't let the government's role be invisible and replaced by other parties because empowering farmers is a priority program that must be implemented properly," said Airlangga.

In the meeting, it was also discussed about accelerating the realization of Agricultural Equipment and Machinery Business Credit (KUA) as one of the government's programs to mitigate the risk of El-Nino's impact.

KUA is a financing program for the procurement of agricultural tools and machinery that is used as an Alsintan Taxi. The KUA program can be accessed with a low interest rate or margin of 3 percent because it receives subsidies from the government. The value of the KUA ceiling ranges from Rp. 500 million to Rp. 2 billion, with a maximum down payment rule of 10 percent of the value financed and without additional collateral.

However, it is necessary to accelerate the implementation of the KUA by completing the legal basis needed. The basis for implementing the KUA is guided by Permenko 3 of 2023 which has not changed, while waiting for the results of the evaluation of the implementation of the KUA in 2023. Therefore, for the sake of running the KUA financing program that is right on target, the Ministry of Agriculture is encouraged to have data on prospective KUA by name debtors, by address, by location.

"Currently we are facing El-Nino which has the potential to cause our agricultural production to not be optimal. With Alsintan's Business Credit financing, we hope to support the optimization of agricultural production in the future. Therefore, it needs to be realized properly," said Airlangga.

Meanwhile, Deputy Minister of Finance Suahasil Nazara assessed that the Financing Policy Committee for MSMEs encourages the active role of the government's internal auditors, which in this case the Supreme Audit and Development Agency (BPKP) in every stage of policy formation and implementation and evaluation of the KUR program.

"The government encourages and supports the audit conducted by BPKP on KUR policies comprehensively, for the sake of realizing good governance in the implementation of the KUR program. The result of this comprehensive audit process will be the basis for KUR policies in the future," said Suahasil.

As for the issuance of the Decree of the Minister of Finance Number 317 of 2023 which provides legal certainty in the payment of interest subsidies or KUR margin subsidies, it affects the average performance of KUR distribution which shows an increasing trend of daily distribution when compared to Semester I-2023.