Jakarta | The government is finalizing the distribution of People's Business Credit (KUR) funds for 2016, with an allocation expected to reach Rp 120 trillion at an interest rate of 9%. The government will consider Regional Development Banks (BPD), Rural Banks (BPR), and non-bank financial institutions as KUR distributors.
"The target for next year is Rp 100 trillion, but it could reach Rp 120 trillion if the absorption is good and the interest rate is 9%. Then, those allowed to distribute it are banks whose NPLs for MSMEs do not exceed 5%. If it exceeds that, they are not allowed, regardless of who they are," said Coordinating Minister for Economic Affairs Darmin Nasution after a coordination meeting at his office in Jakarta, Monday (28/12/2015).
Furthermore, Darmin said the government would consider BPDs as KUR distributors. "Some BPDs will be included, some will not. With the condition that for any institution, including non-BPDs, they can participate if they improve their banks so that their NPL is at most 5%," he added.
Darmin explained that BPDs, BPRs, and private banks could register as KUR distributors, provided their NPL does not exceed 5%. The disbursed KUR funds will be audited by the Financial and Development Supervisory Agency (BPKP).
"This will be audited by BPKP and possibly even the Supreme Audit Agency (BPK). Therefore, private institutions that want to participate and meet the requirements must record their KUR separately from other activities. Otherwise, everything will be audited. To ensure that only the KUR is audited, they must maintain special records specifically for KUR," he said.
Additionally, Darmin stated that the distribution target would not only be assessed in terms of the total amount disbursed but also the number of debtors receiving KUR.
"KUR distribution will also be evaluated based on the number of debtors. It should not be limited to retail loans only. Retail loans have a higher ceiling, up to Rp 500 million. They must also provide microloans, which may only amount to Rp 20 million or Rp 15 million," he explained.
Darmin emphasized that the target of KUR is all productive activities that meet banking eligibility criteria. The government, through the Financial Services Authority (OJK), is also preparing a pilot project for financing companies as KUR distributors.
"OJK is preparing a pilot project for financing companies because they also have strong capabilities. We have asked OJK to start with just two or three companies. If it runs smoothly, it can then be expanded," he added. (source: detik.com)