KUR Distribution in North Sumatra Has Yet to Reach the Ceiling
Bank Indonesia (BI) has acknowledged that the realization of People’s Business Credit (KUR) distribution in North Sumatra in 2010 reached only Rp 842.72 billion, falling short of the allocated ceiling of Rp 1.74 trillion due to many applicants struggling to meet the requirements.
"Although it has not reached the ceiling, North Sumatra’s KUR realization of Rp 842.72 billion with 160,159 debtors was the fifth highest in the country after East Java, West Java, Central Java, and South Sulawesi," said Nasser Atorf, Head of BI’s North Sumatra-Aceh Regional Office, in Medan on Tuesday (1/3).
He made this statement at a meeting between regional bank executives and representatives from the Indonesian Farmers Association (HKTI) and the Indonesian Fishermen Association (HNSI), facilitated by North Sumatra's representative in the Regional Representative Council (DPD RI), Parlindungan Purba.
Nasser pointed out several issues affecting KUR distribution, particularly for farmers and fishermen, including:
- Difficulties in meeting bank eligibility requirements (bankability).
- Short loan tenures, limited to five years for investment credit and three years for working capital credit.
- Fixed monthly installment payments, which may not align with the fluctuating incomes of borrowers.
- Public misconceptions that KUR is a government grant, leading to some recipients believing they do not need to repay the loan.
He expressed hope that HKTI and HNSI leaders would help disseminate accurate information about KUR to their members.
"BI fully supports the expansion of KUR distribution. Banks remain eager to channel KUR as per the government's directive," he said.
Bank Rakyat Indonesia (BRI) Regional Head for North Sumatra, Don Simatupang, stated that as of December 2010, BRI had disbursed Rp 500 billion in KUR, accounting for over 50% of the province’s total KUR distribution.
"BRI leads KUR distribution in North Sumatra, but as a result, it also has the highest non-performing loan (NPL) rate at 23%," he admitted.
Despite the high NPL rate, BRI remains committed to KUR distribution, setting a minimum growth target of 30% for 2021.
Masdin E. Girsang, Deputy Chairman of HKTI North Sumatra, highlighted that very few farmers have benefited from KUR due to stringent requirements, particularly regarding collateral.
"It’s strange that commercial loans, which often have lower interest rates than KUR, require fewer conditions than KUR itself," he noted, accompanied by HKTI Deputy Secretary, Parlin Doni Sipayung.
Parlindungan Purba stated that the meeting aimed to address misunderstandings between banks and potential KUR recipients.
"We hope that this meeting helps banks understand the challenges faced by KUR applicants while also clarifying the loan requirements for borrowers. This way, KUR distribution can proceed more smoothly, in line with government expectations," he concluded.
(Source: Analisadaily.com)