The Jakarta Post
The disbursement of loans under the micro credit program (KUR) for microbusinesses has reached Rp 10 trillion (US$724 million) since the special lending program was reintroduced in September, a senior government official has said.
Cooperatives and Small and Medium Enterprises Minister Anak Agung Gede Ngurah Puspayoga said in Jakarta on Wednesday that the amount had accounted for only half of the Rp 20 trillion estmated for this year.
He said that the special lending program, which offers a lending rate of 12 percent per annum, was designed to further promote the role of micro, small and medium enterprises (MSMEs) in the economy.
The program only required collateral for loans above Rp 25 million to ensure more micro businesses benefited from the subsidized loans, he said.
The government aims to disburse more than Rp 20 trillion by year-end and plans to lower interest to 9 percent next year, with total disbursement expected to reach Rp 120 trillion.
At present, borrowers pay an interest rate of 12 percent, and the government pays its difference with a commercial rate that reaches about 22 percent.
'I urge you to get a business permit because if you don't it'll be hard to apply for a loan. Business permit registration is easier now as the process is not as lengthy, less bureaucratic and costs less. You can do it free in your districts,' Puspayoga said during the opening of the Indocraft MSMEs Fashion, Products and Crafts Expo at the Jakarta Convention Center in Central Jakarta on Wednesday.
KUR can be acquired from Financial Services Authority (OJK)-appointed banks, such as Bank Rakyat Indonesia (BRI), Bank Negara Indonesia (BNI) and Bank Mandiri. The special loans have been offered for many years, but the program was temporarily halted late last year on technical reasons.
Budiarto Linggowijono, vice chairman of the creative industry and MSMEs under the Indonesian Chamber of Commerce and Industry (Kadin), said that the planned 9 percent interest rate next year was still high compared to neighboring countries.
'We are the highest in ASEAN after the Philippines with around 6 percent and even far higher than Japan with only 3.65 percent for startups and less than 2 percent for running businesses,' Budiarto told reporters at the same event.
He said that the ideal interest rate for Indonesia was 5 percent but that it would take at least two years to get to that rate.
Minister Puspayoga also stated that product patent registration was another important issue that needed to be addressed to protect against foreign copycats. He said that patents could now be registered online for free and within an hour.
Kadin's Budiarto also said that the manpower quality of MSMEs determined the capacity of MSMEs to compete with global products.
'Many of us are unaware of market needs. Many MSMEs produce their goods without enough market research. That's a pity, so the government should be an agent of business intelligence to inform them of market needs abroad. We have a lot of commerce chambers abroad that can provide such information,' he said.
Business units in the country currently are dominated by the presence of 58 million MSMEs or 99.9 percent of total businesses. However, the contribution of MSMEs to the gross domestic product (GDP) is only about 57.8 percent, relatively low compared to 42.2 percent contribution from big enterprises, which make up only 0.1 percent of total businesses. (rbk)
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