Semester I 2025, KUR Distribution Reaches IDR 131.84 Trillion To 2.28 Million Debtors

JAKARTA - The People's Business Credit Program (KUR) in the first half of 2025 showed a strategic role in boosting the productivity of the MSME sector and strengthening the national economic recovery amid global uncertainty.

Coordinating Minister for Economic Affairs Airlangga Hartarto said that the realization of KUR distribution in the first half of 2025 reached IDR 131.84 trillion or 45.86 percent of this year's target.

According to him, this achievement reflects the high enthusiasm of MSME players in utilizing government subsidized financing in the midst of challenging national economic conditions.

Airlangga explained that as of June 30, 2025, KUR had reached 2.28 million debtors with a controlled credit level (NPL) of 2.38 percent, much lower than the NPL of commercial MSME loans of 4.36 percent.

He also emphasized that 60 percent of KUR distribution has succeeded in entering the production sector, indicating that this program is effective in increasing MSME productivity.

As part of Asta Cita's vision of President Prabowo's administration, the Government has prepared two major breakthroughs in the KUR policy.

Airlangga conveyed that first, the ease of access to KUR for sugarcane farmers to support the target of self-sufficiency in consumption sugar in 2028, including relaxation of the requirements and support of business partners as guarantor.

"Imagine, 86 percent of the people's sugar cane has grown and needs to be rejuvenated immediately. Without quick intervention, the dream of self-sufficiency in sugar will be difficult to achieve. The ease of KUR for the agricultural sector, especially the people's sugar cane commodity, is here as a concrete solution," he said in his statement, quoted on Sunday, July 12.

Airlangga explained that the Government provides relaxation of KUR access for sugarcane farmers and those who have access to commercial credit can still apply for KUR, a relaxation that reflects the urgency of this program.

In addition, he said that business partners (off-takers) who had collaborated with sugarcane farmers were also given the opportunity to validate their fostered farmer groups.

"This can speed up the process of disbursing funds for the Special KUR scheme for the fostered business group. Moreover, KUR recipients who are fostered off-taker partners who act as validists (guarantors) can be exempted from additional collateral participation requirements because the collateral is sufficient in the form of financed businesses," he said.

Airlangga conveyed the second breakthrough, namely a new financing scheme in the housing sector that supports the Three Million Houses Program with credit facilities for developers, contractors, MSME material traders, as well as MSME buyers or house renovators with competitive subsidy interest.

The scheme is designed with two approaches, namely on the supply side (supply) the developers, contractors, and building materials traders on the MSME scale can access loans of up to IDR 5 billion with low interest rates through the provision of interest subsidies/subsidies for margins by the Government at 5 percent (fixed p.a).

Furthermore, on the demand side, MSMEs who want to buy, build, or renovate houses in business frame also get access to cheap financing by providing loan ceilings of up to IDR 500 million with interest rates of 6 percent to 9 percent per year and tenors of up to 5 years.

"The housing sector has a powerful multiplier effect of the economy. Each rupiah that enters will produce Rp1.74 economic output. Not to mention the potential to absorb 13.8 million workers per year. This is not just building a house, but building an economic future," he explained.

To maintain this momentum, Airlangga conveyed that the Government will increase the KUR ceiling in 2025 by IDR 117 trillion and increase the budget for interest subsidies/KUR margin subsidies by IDR 1.2 trillion.

He added that in the first half of this year, he also recorded significant financial inclusion achievements, with more than one million business actors accessing KUR for the first time and another half million successfully advancing to class or graduation.

According to him, this proves that KUR is not just giving fish but actually giving hooks and teaching how to fish.

Airlangga conveyed that the synergy with the local government also showed positive results, where of the 1.87 million potential debtors uploaded by the regions, 1.27 million have become active debtors where North Maluku, Yogyakarta, and South Sulawesi recorded the highest conversion rate as well as showing the seriousness of the regions in encouraging MSMEs.

In addition, he conveyed other programs such as Alsintan Credit also showed progress with 15 channeling banks ready to distribute cheap funds for agricultural mechanization. Meanwhile, Labor Intensive Industry Credit is in the stage of completing and completing regulations.

"To maintain this positive momentum, the Government has prepared a budget for interest subsidies of IDR 38.28 trillion for 2025. With the performance of the first semester which is encouraging for distribution projections until the end of the year, it is predicted that it will exceed the target," he added.

Airlangga emphasized that KUR and other government financing programs not only provide capital, but also hope and skills, become the backbone of the people's economic empowerment in realizing Indonesia Gold 2045.