Government Provides Opportunity for Indonesian Migrant Workers (TKI) to Utilize KUR
Coordinating Minister for Economic Affairs Hatta Rajasa announced that the government will provide KUR (People’s Business Credit) facilities for Indonesian migrant workers abroad with an 80 percent government guarantee. This measure is expected to expand and enhance the effectiveness of KUR disbursement. Following the signing of a memorandum of understanding (MoU) on KUR between the government and the implementing banks in Jakarta last week—which was attended by several ministers and CEOs of state-owned banks—Hatta explained that the KUR facility, backed by an 80 percent government guarantee, not only eases the process for TKI working overseas but also ensures that the loans are monitored and measured so as not to become burdensome.
“The provision of this KUR scheme for TKI is expected to ease their burden,” he stated.
According to the plan, the initial phase of the TKI KUR scheme will be limited to specific destination countries, starting with Malaysia.
BRI President Director Sofyan Basir added that the KUR program is intended to prevent TKI from falling prey to moneylenders.
“We will establish a closed system through PJTKI and strive to minimize risks. Generally, TKI are forced to sell assets like land or investments at exorbitant interest rates imposed by moneylenders, which becomes a burden,” he explained.
Sofyan detailed that the KUR scheme for TKI offers a maximum credit ceiling of Rp15 million for unskilled workers, and up to Rp60 million for those employed as nurses or technical workers—depending on their educational background and salary levels. With a loan term of 12 to 36 months, repayments will be directly deducted from the borrower's salary by the company overseas via PJTKI, which in turn will settle the payments with the bank.
In addition to the TKI scheme, the government has revised other KUR provisions. These improvements include:
- Increasing the Micro KUR ceiling from Rp5 million to Rp20 million.
- Raising the government guarantee for sectors such as agriculture, marine and fisheries, forestry, and small industries from 70 percent to 80 percent.
- Boosting the KUR ceiling for the linkage executing program (indirect KUR disbursement) from Rp1 billion to Rp2 billion.
- Extending the credit or investment financing term for perennial crop plantations to 13 years.
So far, the disbursement of KUR from the banking sector to the MSME sector has reached 58.3 percent (Rp7.646 trillion) of the government’s target of Rp13.1 trillion.
Bank Indonesia Deputy Governor S. Budi Rochadi noted that the non-performing loan (NPL) ratio for KUR has consistently declined—from 6.03 percent in January 2010 to 4.92 percent by July 2010. With net NPL for banks set at around 5 percent, the KUR NPL remains below the threshold. Budi attributed this decline to significant credit expansion accompanied by effective risk management.
“Improved risk management in banks has enabled better control over NPL, and the process for banks to file claims to Askrindo and Jamkrindo has become easier,” he explained.
Minister of Cooperatives and MSMEs Sjarifuddin Hasan emphasized that maintaining a low NPL ratio is not the primary focus of the KUR program, which is designed to foster public welfare. He credited the high loyalty of KUR recipients for keeping the NPL under control, or at least preventing any upward trend.
Sofyan Basir also mentioned that KUR borrowers have shown great cooperation due to the simplicity of the scheme.
“They only pledge their core business assets since the banks do not require collateral such as motorcycles, land, or other items. This is why they are very loyal and cooperative,” he stated.
By enhancing the loan scheme, Sofyan anticipates that KUR disbursement will continue to grow, further stimulating the micro-economy of small business owners.
(source: bataviase.co.id)