The Office of the Coordinating Economic Minister's deputy for macroeconomic and finance, Iskandar Simorangkir, has said the government has allocated Rp 120 trillion (US$8.39 billion) for micro credit program Kredit Usaha Rakyat (KUR) this year, higher than the Rp 106.6 trillion allocated last year.
He said in Jakarta on Thursday that the government was optimistic that more micro and small businesses would accept KUR credits as the interest rate had been decreased to 7 percent this year from 9 percent last year.
“Learning from experience, the interest rate decline would boost demand for the credits,” he said at a press conference at his office.
He said the disbursement of KUR funds reached Rp 95.6 trillion as of Nov. 30, 2017, 89.6 percent of the target.
“[The disbursement] by the end of 2017 was expected to reach nearly 100 trillion or above 90 percent,” Iskandar said, adding that the government disbursed Rp 94.3 trillion in KUR micro credits in 2016.
KUR is a government program aimed at providing micro and small businesspeople with soft loans so that they can expand their businesses. The government cooperates with banks and other financial institutions to distribute the funds. (fny/bbn)