SUBSIDIZED KUR CREDIT TO REACH RP120 TRILLION BY YEAR-END

By Andi Abdussalam

Jakarta, Dec 7 (Antara) - In an effort to help small businesses obtain cheap financing, in 2007, the government had launched a subsidized micro business financing scheme or subsidized People's Business Credit (KUR) scheme.         The amount of KUR credit allocation this year is set at Rp123.631 trillion. Until last October, a total of Rp113 trillion had been channeled to recipients and it was expected that by the end of the year, the amount of KUR would reach Rp120 trillion. Next year, the government hopes that it would channel credit amounting to Rp140 trillion to small businesses.              "We are sure that until the end of this year, KUR provision will reach Rp120 trillion and next year it is estimated to increase to Rp140 trillion," Chief Economic Minister Darmin Nasution said during the launch of the Special KUR for People's Livestock in Kebon Agung Village, Sidoharjo, Wonogiri District, Central Java, on Thursday (November 6).               At the event, which was also attended by the Governor of Central Java, Ganjar Pranowo, Nasution said that currently, the KUR offered is more extensive as compared to when it was first launched in 2007.

CREDITS TO REACH SMALLEST SEGMENT OF BUSINESSPERSONS

By Andi Abdussalam

Jakarta, Feb 16 (Antara) - The government is currently giving greater attention to small businesses, notably micro-, small-, and medium-scale businesses (UMKM), by increasing the volume of its subsidized credits through the micro business loan (KUR) scheme.         Last year, it had set a target to provide KUR worth Rp120 trillion for UMKM. Although only Rp94.4 trillion of the 2016 target was realized, yet it significantly increased from the KUR extension worth Rp22.7 trillion of the targeted Rp30 trillion in 2015.         This indicates the government's highest commitment to developing small businesses, which play the biggest role in the nation's gross domestic product (GDP) growth.         The Ministry of Cooperatives and Small and Medium Enterprises, on its official website, revealed that the number of UMKM in Indonesia had reached 58 million in 2014. Other data showed that UMKM had contributed about 53 percent to the nation's GDP in 2011.         Hence, UMKM are now drawing greater government attention. This year, it is also planning to provide a special credit scheme for the smallest segment of businesspersons. This was disclosed recently by Finance Minister Sri Mulyani Indrawati who termed the credit scheme as 'super micro' credit.

SMOOTH SUBSIDY TO SPEED UP KUR CREDIT EXTENSION

By Andi Abdussalam

Jakarta, Sept 17 (Antara) - The government has over the past several years launched a subsidized loan program for micro, small and medium-sized enterprises called the KUR credit scheme to boost the economic activities of small businesses.         The program is conducted by KUR credit distributors appointed by the government. The interest of the KUR credits is subsidized so that distributors can extend loans to recipients with lower interest rates.         The interest rates of the KUR credits the recipients had to bear was 22 percent in 2014. It was lowered to 15 percent in 2015 and nine percent this year. The government is planning to cut it further to seven percent in 2017.         In order to accelerate the distribution of KUR credits, which this year is targeted to reach Rp120 trillion, the government should guarantee the smoothness of its subsidies so that the program would not disturb the cash flow of distributing institutions.         Bank Indonesia (BI) said the government needs to be organized and disciplined in allocating the budget for subsidizing the interest of its KUR credit program for small businesses

BANKS ACCELERATE DISBURSEMENT OF MICRO LOANS

by Andi Abdussalam

Jakarta, Nov 20 (Antara) - Banks assigned by the government to distribute micro loans (KUR) to small and medium-sized enterprises (SMEs) are accelerating efforts to provide credits, so that the amount would reach over Rp20 trillion this year.          Moreover, the amount of credits that had been extended until November 17 by distributor banks -- Bank BRI, Bank Mandiri, and Bank BNI -- only reached Rp11.7 trillion, or less than half of the government's target to extend KUR worth Rp30 trillion this year.          "The distributor banks are making various efforts to expedite the realization of KUR to small businesses," Braman Setyo, the deputy for business restructuring and development of the Ministry of Cooperatives and SMEs, stated here on Thursday (Nov. 19).          He noted that the distribution of KUR credits until November 17, through Banks BRI, Bank Mandiri, and Bank BNI, had only reached Rp11.7 trillion. Therefore, the three executing banks are doing their best to expedite the provision of KUR, so that the amount disbursed this year could reach over Rp20 trillion.

POLICY PACKAGE WIDENS MICRO LOAN ACCESS FOR ENTREPRENEURS

by Andi Abdussalam

Jakarta, Oct 9 (Antara) - The third phase of the government's economic policy package offers a chance to get micro loans (KUR) for entrepreneurs and for families with routine income, who wish to do business in the productive sector.          Chief Presidential Communication Team leader Ari Dwipayana said in written statement on Wednesday that the third economic policy package included efforts to expand the recipients of micro loans for small businesses, known as KUR.          "In order to widen banking access for entrepreneurs through the KUR scheme, the government has lowered the interest rate for KUR loans from about 22 percent to 12 percent," Ari said.          Under the new policy package, the government said families with routine income, who are willing to do business in the productive sector, would receive KUR credits.          With this policy, banks that have been assigned to distribute the KUR credits have been asked to actively offer the loans to such families. "This is expected to boost the number of KUR loan recipients and to facilitate the emergence of new entrepreneurs," Ari said.

BUSINESSES EXPECTED TO GROW WITH INSURED CREDITS

By Andi Abdussalam

Jakarta, May 13 (Antara) - Small and medium enterprises (UKM) should not be apprehensive regarding their business credits as the government has attempted to minimize credit risks through cooperation between a state-owned money-lending agency and a state credit insurance company.          The Agency for Revolving Fund Management for Cooperatives and Small and Medium Enterprises (LPDB-KUKM) has cooperated with state-owned credit insurance company Perum Jamkrindo to minimize the risks of non-performing loans (NPL) of UKM.           Last week, a cooperation agreement between the LPDB and Perum Jamkrindo was signed by the leaders of the two government institutions in Jakarta, on Wednesday.          Besides this, the LPDB-KUMKM has also cut its interest rate on loans from 6 to 5 percent this year. The LPDB's interest rate has been reduced to 5 percent considering that it is a non-profit institution aimed at offering business stimulus in the form of revolving funds to small businesses.

GOVT TO WRITE OFF DISASTER VICTIMS' CREDITS

By Andi Abdussalam

Jakarta, Nov 7 (ANTARA) - The government is expected to write off  debts it has provided under the small-holder's credit (KUR) scheme for the victims of flash floods in Wasior, West Papua, Mt Merapi eruption in Central Java and earthquake/tsunami in Mentawai Islands in West Sumatra.          "We will do our best to write off their KUR debts. The victims of natural disasters in Wasior, Merapi and Mentawai must be freed from their KUR debts," Minister for Cooperatives, Small and Medium-Scale Enterprises (UKM), Sjarifuddin Hasan, said here on Sunday.          The ministry of cooperatives and UKM will therefore directly take stock in the field of the number of KUR debtors and conduct a cross-check in its data base to ensure the number of KUR recipients who needed to be freed from repayment obligations.          "We will write off their debts and do our best to provide them with another credit so that they would be able to re-activate and recover economic activities in their respective regions," the minister said.           Three natural disasters, particularly the Mentawai and Merapi ones, are at present in the stage of emergency response where all government agencies and ministries are being mobilized to help provide assistance in accordance with their respective duties and authorities.          After that the regions would enter the stage of reconstruction and rehabilitation. "We will get down there to assist them in recovering their economy and rebuilding their future," the minister said.          In Mentawai for example, the earthquake and its subsequent tsunami have affected KUM clusters which produced handicraft products and local handicraft souvenirs. In Yoyakarta and Central Java, which were impacted by Mt Merapi eruption, several tourist destination villages which also UKM production centers were affected by the mount eruption.          "We are concerned with the disasters there but we will  make a joint effort to recover the economic activities there so that the wheel of economy would roll on again," Minister  Sjarifuddin Hasan said.          Besides, the government will also write off the debts of cow breeders who were affected by the eruptions of Mt Merapi in Central Java and Yogyakarta, according to Guritno Kusumo, secretary to the minister for cooperatives and UKM.          "The government will also help repair cooperatives and UMK equipment which was damaged by eruptions," he said.           The government has also set aside Rp3 trillion for social affairs assistance, which in the past was known as rotating funds.       "The ministry of cooperatives and UKM this year predicts Rp1.2 trillion in rotating funds that could be repaid by cooperatives," he said.           He said that recipients of social affairs assistance had no obligation to repay it but the ministry of cooperatives and UMK hoped the funds would be rotated.          Head of Industry, Trade and Cooperatives Service of Yogyakarta Astungkoro said that there were two cooperatives which were affected by Merapi eruptions in Sleman, namely the Kaliurang UPP and Sarono Makmur cooperatives.          These cooperatives among others managed cow breeding. He said that there were 325 cows which were killed by the eruptions there, of which 172 belonged to the Kaliurang UPP cooperatives.          "We are still counting losses which had to be borne by the cooperatives and UKM as a result of the mount eruption," he said. Hopefully this would be compensated by the government.           In the meantime, the Indonesian Native Businessmen Association (HPPI) also called on the government to reschedule the credits it had provided to micro-small and medium-sized businesses (UMKM) which have become the victims of natural disasters, particularly Mt Merapi eruption.          "The government should take a special policy regarding the fate of businesses which are affected by the Mt Merapi eruptions," Deputy Secretary General of HPPI Herman H Suropo said.          Rescheduling could be imposed in a period of three to six months, or in an unspecified period due to the unpredictable condition of Mt Merapi, which has erupted several times and killed at least 135 people and caused the evacuation of 283,000 others since October 26, 2010.          Herman said that the government needed to issue the policy for the rescheduling of the victims' credits because it was important for businesses to boost the real sector there in the post disaster period.          Thus, HPPI hailed the government decision to compensate the local people's  cattle and animals which were killed in in Mt Merapi eruption. The government could also take the same policy for UMKM businesses in the danger zones.          "Hundreds of pondoh zalacca palm farmers, restaurants and home industry businesses in Kaliurang, Yogyakarta, and also hotels within a radius of  20 kilometers from Merapi are affected by eruptions," Herman said.          He said that based on the idea of the Indonesian Red Cross (PMI) Chairman Jusuf Kalla, the disaster handling should consist of three phases, namely emergency response where the victims must be evacuated and safeguarded, rehabilitation of disaster locations by reconstructing people's settlements and recovery where businesses and economy in the disaster regions are rebuilt.          "In this case, rescheduling of UMKM credits can be done during the third phase of the disaster handling. The aim is to revive the spirit of UMKM players," Herman said.T.A014/H-NG/A/R013) 07-11-2010 23:21

CREDIT EXPANSION BOOSTS ECONOMIC GROWTH

By Andi Abdussalam

Jakarta, Aug 5 (ANTARA) - The expansion of bank credits which grew at an average of 19.6 percent to Rp140 trillion has been able to fuel economic growth to 5.9 percent in the first half of this year.          Economic observer Tony Prasetiantono  of the Gajah Mada University (UGM) said Indonesia's economic growth  reached 5.9 percent in the first semester of this year on the back of a bank credit expansion.          "The economic growth was fueled by an expansion of bank credits," Tony said  in response to the Central Bureau of Statistics (BPS) data which indicated on Thursday that Indonesia's economic growth in the first semester of 2010 had reached 5.9 percent.          He said bank credit expansion would increase in the second semester of this year, followed by a hike in government fiscal spending that would in the end drive up economic growth to over the 5.8 percent target.          "Credit expansion in the second semester is expected to reach an even higher rate, namely about 20 percent, thus boosting further economic growth," the economist said.          Bank Indonesia director of research and banking regulations Wimboh Santoso said last week the value of credits distributed by banks per June 2010 reached Rp140 trillion.          "Credits keep growing and are under normal conditions," he said. Right now Bank Indonesia is still preparing a regulation linking reserve requirement (GWM) and Loan to Deposit Ratio (LDR) to push banks to extend loans.          The regulation will require banks to keep their LDR at 75 to 105 percent and those who fail to meet it will get a penalty and have to add more GWM contributions to Bank Indonesia.          "If a bank has a LDR of below 75 percent it will just increase its credits and if its third-party fund is large it may just lower its rate to let the funds to flow out," he said.          And this would further drive up the economic growth.          Tony Prasetiantono said that economic growth in the second semester was expected to be the same as that  in the first semester but the government should pay attention to the impact of the basic electricity tariff hikes  and the inflation rate.          "Economic growth in the second semester will reach at least the same level as that in the first semester. Actually it could be higher but it is most likely to be corrected by the power rate hikes and inflation," Tony, who is also an independent commissioner of Pemata Bank, said.           Therefore,  he predicted  overall economic growth in 2010 would reach six percent or higher than the government's target.          "I am confident that the 2010 overall economic growth will exceed six percent, which means that it is higher than the government's assumption at 5.8 percent" Tony said.          The Central Bureau  of Statistics (BPS) reported on Thursday that in the first semester of this year  economic growth reached 5.9 percent compared with that in the same period.          The 5.9 percent economic growth was fueled by growing exports, imports and household consumption, the BPS said. Household consumption grew 4.5 percent, gross fixed capital formation 8.0 percent, exports 17.2 percent and imports 20.1 percent, however, government consumption fell 8.9 percent, according to BPS Deputy Head for Balance Sheet and Statistical Analysis Slamet Sutomo.           Based on an increase in gross domestic product (GDP) the domestic economy in the second quarter of 2010 expanded 2.8 percent compared to the first quarter of 2010 and 6.2 percent compared to the second quarter of 2009, he said.          "The GDP based on the current prices and the 2000 constant prices in the second quarter of 2010 reached Rp1,572.4 trillion and Rp573.7 trillion respectively," he said.          The second-quarter growth of 2.8 percent was driven by household consumption which rose 1.2 percent, government consumption 23.5 percent, gross fixed capital formation 2.3 percent, exports 2.7 percent and imports 5.1 percent, he said.          Compared to the same period last year, the economy in the second quarter of 2010 grew 6.2 percent, fueled by household consumption which increased 5.0 percent, gross fixed capital formation 8.0 percent, exports 14.6 percent and imports 17.7 percent, while government consumption fell 9.0 percent, he said.          On a quarterly basis, the economic growth was led by the transportation and communications sector which grew 5.0 percent, followed by the electricity, gas and drinking water sector 4.8 percent and the service sector 3.7 percent.          The transportation and communication sector also was on top of the year-on-year growth, contributing 12.9 percent, with the trade, hotel and restaurant sector trailing behind with 9.6 percent and the construction sector with 7.2 percent, he said.          Slamet said the second-quarter GDP was still dominated by the processing industry, the agricultural sector and the trade, hotel and restaurant sector, contributing 24.9 percent, 15.9 percent and 13.7 percent respectively to it.          In the meantime, President Susilo Bambang Yudhoyono said last week that the government was continuously monitoring the progress being made in relation to economic growth and investment to ensure that the national economic growth target would be achieved.          "We always have to pay attention to economic developments and increase economic growth in the coming four years. Our remaining time in office is effectively  only four years so we have to use it in the best possible way to increase economic growth and  cut the poverty rate," the President said.          He said that investment should be generated because it constituted the main pillar of the country's economy which was related to the availability and development of infrastructure, micro, small and medium economic development.          "Our economic growth target is rather ambitious so that we have to work hard and continue to measure its progress," the head of state said.***2*** (T.A014/A/HAJM/21:30/H-YH) 05-08-2010 21:33: