The Government Encourages The Financing Of The Productive Sector Through Alsintan Credit And KIPK

Deputy for Coordination of BUMN Business Management and Development of the Coordinating Ministry for Economic Affairs Ferry Irawan. (Photo: Doc. Coordinating Ministry for the Economy)

JAKARTA - The government continues to encourage the strengthening of access to productive financing in the agricultural sector and the manufacturing industry, especially those that are labor-intensive, because both are the main supporting sectors of the economy as well as the largest employment absorbers.

However, the agricultural sector still faces challenges in the form of stagnant productivity, minimal investment, and low regeneration of farmers that can disrupt food security.

Meanwhile, labor-intensive industries, particularly foods for drinks, textiles, garment, footwear, to furniture, are under pressure by global competition and reduced export demand.

"The government responded by launching two priority schemes, namely Agricultural Equipment and Machinery Business Credit (Alsintan) to strengthen agricultural mechanization and productivity, as well as Labor Intensive Industrial Credit (KIPK) to support working capital, maintain industrial competitiveness, and maintain jobs in the regions," explained Deputy for Coordination of BUMN Business Management and Development at the Coordinating Ministry for Economic Affairs Ferry Irawan in his statement, Thursday, August 21.

Meanwhile, the Focus Group Discussion (FGD) event Optimizing the Distribution of Alsintan Business Loans and Labor Intensive Industrial Loans, in Bandung, was carried out to optimize the distribution of alsintan business loans, which had previously been regulated in the Regulation of the Coordinating Minister for Economic Affairs (Permenko) Number 3 of 2025 as last amended by Permenko Number 6 of 2025 concerning Guidelines for the Implementation of Agricultural Equipment and Machine Business Credit.

Furthermore, FGD also aims to socialize Permenko Number 4 of 2025 concerning Guidelines for the Implementation of Labor Intensive Industrial Credit.

Alsintan and KIPK loans are two financing schemes that are coordinated by the Financing Policy Committee for MSMEs.

In addition, the committee also coordinated the implementation of various financing schemes for the productive sector, such as People's Business Credit (KUR), KUR for Tebu Rakyat, and Housing Program Credit.

Alsintan Credit Disbursement at 19 August 2025 reached IDR 30.73 billion and has been distributed to 43 debtors with distribution dominated by Bank Sulselbar amounting to IDR 17.85 billion.

"Some of the strategies carried out to optimize the distribution of Alsintan's loans include adjusting the Alsintan Credit policy based on regional potential, providing education and financial literacy related to Alsintan Credit for the use of digital technology, strengthening collaboration between Regional Governments and channeling financial institutions, as well as monitoring and ongoing evaluation of the implementation of Alsintan Credit distribution," he said.

Ferry conveyed that the implementation of Alsintan Credit is expected to strengthen agricultural mechanization, increase production efficiency, and support food self-sufficiency efforts.

Meanwhile, he said that KIPK is expected to support the provision of working capital access and investment, strengthen industrial competitiveness, maintain business continuity, and create new jobs.

For information, on August 14, 2025, a Minister of Industry Regulation (Permenperin) Number 34 of 2025 concerning Criteria for Intensive Industrial Credit Recipients.

One of the arrangements for the Permenperin is that KIPK recipients are individuals or business entities engaged in labor-intensive industries such as the food and beverage industry, textiles, finished clothing, skin, leather goods, and footwear, furniture, and/or children's toys.

The KIPK program is distributed to support financing needs in an effort to revitalize machines to increase productivity.

On the other hand, KIPK debtors can borrow a ceiling of more than Rp. 500 million to Rp. 10 billion for one loan with interest rates borne by KIPK recipients in the amount of difference from interest costs/KIPK Distribution margins reduced by government interest subsidies of 5 percent.

West Java Province itself is one of the main contributors to the national economy where in the second quarter of 2025, West Java's economic growth reached 5.23 percent and this was higher than the national achievement of 5.12 percent.

In addition, West Java is the center of the national manufacturing industry which is dominated by the food-drinking, textile, finished clothing, leg skins, to furniture, and this is in line with the absorption of labor in the labor-intensive sector there which reaches millions of people.

Based on the region, West Java consistently occupies the top three positions in the highest KUR distribution where the realization of KUR distribution in 2025 to 11 August 2025 reached IDR 16.89 trillion and has been distributed to 315 thousand debtors.

The most KUR distribution in West Java is distributed to Bogor Regency. Meanwhile, nationally as of August 11, 2025, KUR distribution reached IDR 162.62 trillion or 56.57 percent of the 2025 target of IDR 287.47 trillion and was given to 2.79 million debtors.