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MSMEs Ministry preparing special loan for food production tools

The Micro, Small, and Medium Enterprises (MSMEs) Ministry is preparing a new ministerial regulation to allow businesses to take loans for food production tools. This initiative aims to ensure national food security.

News Desk (The Jakarta Post)
Jakarta
Wed, January 15, 2025

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MSMEs Ministry preparing special loan for food production tools Micro, Small and Medium Enterprises Minister Maman Abdurrahman speaks during a coordination meeting on food production in Palembang, South Sumatra, on Jan. 13, 2025. Maman said his ministry was preparing a regulation on the provision of KUR microloans for food production equipment. (Kompas.com/MSMEs Ministry)

T

he Micro, Small and Medium Enterprises (MSMEs) Ministry is preparing a ministerial regulation about the subsidized microloan program (KUR) for food production equipment.

“The MSMEs Ministry is preparing a ministerial regulation to allocate Rp 30 trillion [US$1.84 billion] for working capital loans specializing in [food] production equipment,” MSMEs Minister Maman Abdurrahman said in a written statement on Tuesday, as reported by kompas.com.

Maman led a coordination meeting on food production in Palembang, South Sumatra, on Monday. 

This initiative aims to ensure that MSMEs contribute optimally to national food security. The working capital loans target farmers, ranchers and other business owners in agriculture and fisheries, allowing them to access production tools worth up to Rp 2 billion.

Currently, 46 institutions are helping the government distribute working capital loans, mostly state-owned banks like Bank Rakyat Indonesia and Bank Mandiri. The government also aims to strengthen the role of regional development banks (BPD) in the distribution process.

“This is an affirmative move to ensure that MSMEs across the nation get fair and even access to funding,” Maman said.

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The government exceeded its target for KUR microloan loan distributions in 2024, reaching Rp 280.28 trillion as of late December last year. The production sector dominated the distribution scheme, at around 57.8 percent of the total distributed funds.

President Prabowo Subianto’s administration also aims to assist MSME development via other means, such as loan forgiveness for select businesses. This program is regulated by Government Regulation No. 47/2024 on loan forgiveness for MSMEs.

The loan forgiveness program applies to MSMEs with bad debt records in state-owned banks. According to Maman, 1 million MSMEs are eligible for this program.

Among several eligibility criteria for loan forgiveness, MSMEs receiving KUR microloans cannot have their debts erased.

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