Government Reveals KUR Financing Can Replace Loans

Assistant Deputy for Capital Markets and Financial Institutions, Coordinating Ministry for Economic Affairs Gede Edy Prasetya said that the distribution of People's Business Credit (KUR) can be an alternative access in financing and can replace online loans (pinjol).

Therefore, Gede invites the public to use KUR service facilities for access to capital in the productive sector rather than using loan services.

"So hopefully later we can replace it (pinjol). We educate the public that we make a good business first, then fulfill the conditions later we will definitely get it, and that will definitely help them, because the interest is very low," said Gede at the event at the KUR Meets The Press event, Wednesday, November 13.

Gede conveyed that financing through KUR is relatively safer than loans which often cause problems related to the misuse of customer personal data.

In addition, Gede explained that KUR financing offers competitive interest and there is no additional collateral for a maximum loan value of IDR 100 million. Where it is reflected in the level of bad credit or Non-Performing Loan (NPL) KUR being at 2.19 percent.

"Our current NPL is 2.19 percent. So yesterday the issue that said 5 percent was not true," he said.

Gede assessed that the relatively low number of NPLs shows that KUR financing is managed properly so that it becomes a safer choice for the community than borrowing.

Furthermore, Gede conveyed that the government continues to be committed to strengthening regulations and supervising KUR programs so that they are more targeted.

"Hopefully later if this can be done well, maybe later the loan will also be able to help to solve the problem," he explained.

The Coordinating Ministry for Economic Affairs noted that the realization of KUR reached Rp246.58 trillion until October 2024 which was distributed to 4.27 million debtors. The realization of KUR reached 88.06 percent of the 2024 KUR distribution target set at Rp280 trillion.

"As of October 31, the realization of KUR distribution has reached Rp246.88 trillion," said Deputy for Macroeconomic Coordination and Finance at the Coordinating Ministry for the Economy Ferry Irawan.

Ferry said that since 2015 the KUR program has reached around 48.63 million debtors who have utilized the service. Meanwhile, specifically in 2024, the number of KUR debtors reached 4.2 million as of October 31.

According to Ferry, there was a significant increase in the new debtor target which reached 113 percent of the initial target.

"In 2024, if we look at the new debtor, there are around 113 percent of the initial target, from 1.7 million now 1.9 million new debtors. So of the total 4.2 million debtors, 1.9 million are new debtors who access KUR," he explained.

Ferry said that from 2015 to 2024 the total outstanding KUR reached IDR 490 trillion and this figure is not small so it has an impact on the national economy.

"This is not a small number, which we can contribute to, not only to the debtor, but also to our economy in general," he explained.