Jokowi Asks For MSME Loan Portion To Increase To 30 Percent, Increase In Unsecured Loan Ceiling By Rp100 Million

Coordinating Minister for Economic Affairs Airlangga Hartarto (Photo: Capture the Youtube screen of the Presidential Secretariat)

JAKARTA - The Coordinating Minister for Economic Affairs Airlangga Hartarto received directions from President Joko Widodo (Jokowi) to enlarge the portion of credit for micro, small and medium enterprises (MSMEs) to 30 percent of the total credit currently distributed.

According to him, President Jokowi is still not satisfied with the current MSME credit performance which is still at the level of 18 percent to 20 percent. The head of state's instruction is intended to accelerate the process of economic recovery due to the crisis caused by the pandemic.

"The President's directive regarding the financing of MSMEs calls for greater challenges so that there is a leap increase so that it is targeted to be more than 30 percent by 2024," he said in a virtual press conference after a limited meeting at the Presidential Palace in Jakarta, Monday, April 5.

Airlangga added that one of the strategies the government has taken to achieve this target is to change several regulatory schemes in the distribution of People's Business Credit (KUR).

"In connection with the President's directive regarding unsecured KUR, which has so far been under Rp. 50 million to be increased to Rp. 100 million," he said.

Another strategy that Airlangga mentioned included non-KUR MSME loans, which were previously Rp. 500 million to Rp. 10 billion, enlarged to Rp. 20 billion.

For information, the realization of KUR throughout 2020 has succeeded in breaking the target of 104 percent with a value of not less than IDR 198.53 trillion.

This figure was supported by KUR micro with a loan value of under Rp. 10 million which was successfully realized at Rp. 8.49 trillion, or 4 percent of the total with the number of debtors who received this facility as many as 2.4 million customers.

Then, small KUR with a ceiling value of Rp. 10 million to Rp. 50 million, managed to distribute Rp. 128 trillion or about 65 percent of the total. Meanwhile, the number of customers for this segmentation is said to be 3.6 million customers.

Furthermore, medium KUR with a ceiling of Rp. 50 million to Rp. 500 million recorded realization of Rp. 59 trillion with a total recipient of 2.4 million customers.

"Some of the changes and directions from the President are expected to be immediately followed up and then the progress is reported again," Airlangga concluded.