JAKARTA — The disbursement of small business credit (KUR) continues to face a variety of challenges. The Ministry of State-Owned Enterprises detailed several obstacles during a hearing with Commission VI of the House of Representatives today. Parikesit Suprapto, Deputy for Banking and Financial Services at the ministry, noted that many banks still lack the necessary network to effectively distribute KUR.
Among the six banks responsible for disbursing KUR, BRI stands out with the most extensive network. Unsurprisingly, the bank—widely recognized for its strong rural roots—recorded the highest KUR disbursement, reaching IDR 12.84 trillion. In contrast, the other banks have yet to match BRI’s network coverage.
A second major challenge is the escalating non-performing loan (NPL) ratio associated with KUR. As of December 2009, the NPL rate stood at 4.92%. Parikesit explained that this high NPL level is disproportionate to the guarantee fee, currently set at 1.5 percent, resulting in a deficit or loss margin for the guarantor companies. “This discrepancy between the fee and the NPL rate creates a loss margin for the guarantors, which could jeopardize the continuation of the KUR program unless additional funds from the state budget (APBN) are provided to cover these losses,” he said.
To address the issue, Parikesit outlined several potential measures. One option is to lower the NPL rate for KUR, while another is to increase the fee charged by the guarantee companies. Alternatively, the government could inject additional capital into the guarantors—currently PT Asuransi Kredit Indonesia and Perum Jamkrindo.
It is worth recalling that when the KUR program was launched in 2007, the government infused IDR 1.45 trillion into these two companies. Then, in December 2009, an additional IDR 500 billion was injected. In total, the capital available to the guarantee companies for KUR now stands at IDR 1.95 trillion.
This capital is relatively modest when compared to the total value of KUR disbursed by banks. As of December 2009, total KUR disbursements had reached IDR 17.188 trillion. With a gearing ratio of 1:10, Askrindo and Jamkrindo can guarantee up to a maximum of IDR 19.5 trillion. Although both companies have proposed raising the fee to 3%, this request has yet to receive a definitive response from the government.