Good News For SMEs! Here's How To Get Government Loans Even If Rejected By Banks

Illustration (Photo: Doc. Antara)

JAKARTA - The government is known to use the People's Business Credit (KUR) scheme as the main instrument in distributing cheap financing for micro, small and medium enterprises (MSMEs).

In this way, entrepreneurs in the populist sector simply go to banks that are partners with the government to apply for KUR.

However, in reality on the ground, MSME actors often encounter obstacles because they cannot meet a number of criteria set by banks (unbankable) in taking credit.

The government is not unaware of these obstacles. As a form of partisanship, MSMEs can still access government financing in several ways. This was revealed directly by the Minister of Finance (Menkeu) Sri Mulyani when speaking at The 1'st International Conference on Women and Sharia Community Empowerment forum today.

“Many MSMEs cannot enter the banking system or are called unbankable. That's why there is a revolving fund instrument managed by cooperatives or also ultra micro financing (UMi) managed by the Ministry of Finance," he said on Thursday, August 11.

For information, Ultra Micro Financing (UMi) is a continuation program of the social assistance program which is expected to encourage the independence of micro-enterprises at the lowest level, which cannot be facilitated by banking through the KUR program.

UMi financing is channeled through non-bank financial institutions (NBFIs), such as PT Pegadaian, PT Permodalan Nasional Madani, and PT Bahana Artha Ventura whose funding sources come from the State Budget.

Meanwhile, the requirements for obtaining UMi financing include not getting credit from other institutions or cooperatives, having an ID card, and having a business license or business certificate.

In the UMi program, debtors are given a maximum loan ceiling of Rp. 10 million with a maximum repayment tenor of 52 weeks without collateral and interest of 2 percent to 4 percent.

“These are all evidences of lower alignments at the grassroots level because we realize that many MSMEs have not been able to enter banking. All of these are non-bank financial institutions whose loan conditions are not as complicated as banks," concluded Minister of Finance Sri Mulyani.