Banks urged to disburse more micro loans

The government has urged banks to disburse more loans under the people business loans scheme to boost the development of small and medium enterprises.

"There are not many of those types of loans yet. This year, micro loans for 2.5 million small enterprises should reach Rp 20 trillion [US$2 billion], but so far, the banks have only disbursed Rp 14.5 trillion worth of loans. We need the banks to disburse more loans," Coordinating Minister for the People's Welfare Aburizal Bakrie said, as quoted by Antara news agency, on Thursday.

Banks should not worry about those types of loans defaulting – the default rate for micro loans has already reached 5.6 percent - because the loans are guaranteed by the government, he added.

Bank BRI, Bank BNI, Bank Mandiri, and Bank Syariah Mandiri are some of the banks participating in the people business loans scheme.