Coordinating Minister Airlangga: KUR's Contribution To The 2022 Credit Expansion Is Estimated At IDR 600 Trillion

Coordinating Minister for Economic Affairs, Airlangga Hartarto. (Photo: Doc. Antara)

Coordinating Minister for the Economy Airlangga Hartarto revealed that the contribution of people's business loans (KUR) to credit expansion in 2022 is estimated at around Rp600 trillion or 50 percent. "Of this amount, 40 percent is given to micro-enterprises," said Airlangga at the Maybank Indonesia Economic Outlook 2023 event in Jakarta, quoted from Antara, Wednesday, March 15.

This condition, said Airlangga, illustrates that the Micro, Small and Medium Enterprises (MSMEs) sector has a high durability in the midst of a crisis.

Airlangga emphasized that the government will continue to encourage MSMEs because the sector contributes 61 percent to gross domestic product (GDP) and absorbs 97 percent of the workforce.

Thus, the government will increase the KUR allocation from 2022 which is around Rp360 trillion to Rp450 trillion in 2023, which is accompanied by the addition of a new debtor target of at least 1.76 million debtors and a target debtor of reducing KUR distribution of at least 2.36 million debtors.

In addition, the government also encourages credit distribution to MSMEs in 2024 to reach Rp1,800 trillion or 30 percent of total credit. MSMEs targeted are credit recipient groups with a distribution value of less than Rp10 billion.

Over the past 10 years, he said, lending to MSMEs was still at the level of 22 percent of total credit. This condition must be a concern for banks to think about whether there should be a transfer of portion from commercial credit to KUR.

"This is one of the bank's tasks in facilitating and usually this can be faster if the financed is along the value chain, from vendors to offtakers in certain sector clusters," he said.