JAKARTA – The growth of Micro, Small, and Medium Enterprises (MSME) credit has shown promising progress. Data from Bank Indonesia (BI) indicates that credit in this segment grew by 8.62%, rising from Rp 360.67 trillion in January 2011 to Rp 391.76 trillion in March 2011. This growth rate is more than twice the industry average, as overall bank credit during the same period only increased by 3.94% to Rp 1,814 trillion.
The growth of MSME credit also outpaced micro, small, and medium (MKM) credit, which includes loans with a maximum ceiling of Rp 5 billion. According to the central bank, the MKM credit segment, which still mixes productive and consumer loans, only increased by 5.9% to Rp 975.16 trillion.
The increase in MSME credit was observed across almost all banking groups, except foreign and joint-venture banks. State-owned banks (Bank Persero) led the increase, recording a 14.2% growth. Meanwhile, Regional Development Banks (BPD) and private banks contributed 5.4% and 4.5% growth, respectively.
Conversely, foreign banks saw an 11% decline in MSME credit, dropping to Rp 7.2 trillion. However, at the same time, their MKM credit increased by 9.4%, the highest among all banking groups. This data confirms that most foreign banks' MSME loans were actually unsecured personal loans (KTA).
Sofyan Basir, President Director of Bank Rakyat Indonesia (BRI), attributed the strong MSME credit growth to the implementation of the People’s Business Credit (KUR) program by state-owned banks (BUMN).
"State banks have a wide branch network, reaching even the most remote areas, which has helped increase credit penetration. More branches mean higher credit volumes," he stated on Friday (20/5).
Banking expert Paul Sutaryono believes that the decline in MSME credit from foreign and joint-venture banks is due to the segregation of MSME credit reporting.
"Many foreign banks had been categorizing unsecured personal loans (KTA) as MSME credit," he explained.
He added that foreign banks have a lower credit penetration in MSMEs due to limited infrastructure.
"Foreign and joint-venture banks tend to avoid the risks associated with MSME lending, opting instead to provide consumer loans," he concluded.
(Source: Kontan.co.id)