The Government Asked Commercial Banks To Apply Single Digit Interest For KUR

Coordinating Minister for Economic Affairs, Airlangga Hartarto. (Mery Handayani / VOI)

JAKARTA - The government, Bank Indonesia and the Financial Services Authority (OJK) are spurring the transmission of lowering the reference interest rate which has been set at the level of 4.75 percent to the real sector financing. The goal is to increase Indonesia's economic growth amid the outbreak of the corona virus or COVID-19.

Coordinating Minister for Economic Affairs Airlangga Hartanto said one of the efforts made was to ask public banks to apply a single or single digit interest rate following the current people's business credit (KUR) rate at 6 percent.

According to Airlangga, each institution or stakeholder has coordinated and carried out their duties to be more responsive in spurring economic growth.

"We encourage real sector business actors. The priority for MSMEs this year is to increase the KUR credit ceiling to Rp190 trillion and the interest rate to 6 percent. The hope is that banks can (provide credit interest) single digits too," he said, after the Omnibus Law event: Breakthroughs. Government for Economic Growth held by Assegaf Hamzah & Partners (AHP), at the Four Seasons Hotel, Gatot Subroto, Jakarta, Thursday, March 5.

Airlangga said, not only encouraging the application of single digit interest. His meeting this morning with BI and OJK also discussed third party funds (DPK) originating from corporations, BUMNs, and other large institutions.

According to Airlangga, the total DPK is estimated at IDR 6,000 trillion. He hopes that in the future the monetary policies issued by the OJK and BI as well as the fiscal stimulus announced by the government can be transmitted to the public, especially the industrial sector.

"The target is that the private sector can be encouraged, especially to maintain the service industry and the sellers (sellers / traders) to continue to grow," he explained.

As is known, the government has lowered the KUR interest rate to 6 percent this year. The KUR interest rate has been cut drastically from 24 percent in 2008 to 7 percent in 2018.

Meanwhile, related to the realization of KUR for the January-December 2019 period, it reached IDR 139.5 trillion or 99.6 percent of the target of IDR 140 trillion.