Indonesia to Increase, Extend Interest Subsidy for Small Borrowers to 2021

JAKARTA, KOMPAS.com – The Indonesian government has decided to continue its microcredit (KUR) interest subsidies until next year in a bid to accelerate economic recovery by empowering micro, small and medium enterprises (MSMEs).

Coordinating Economic Affairs Minister Airlangga Hartarto said that the government would extend the interest subsidy scheme and provide an additional KUR interest subsidy of three percent for six months.

Also read: 12 Million Indonesian SMEs to Get Cash Assistance from Government Soon 

“To speed up the economic recovery amid the Covid-19 pandemic, the need for providing KUR loans to MSMEs is relatively high,” Airlangga said in a statement on Tuesday, December 29.

Besides, Airlangga said that the government would also raise the ceiling for KUR next year to 253 trillion rupiahs ($17.9 billion) from 220 trillion rupiahs ($15.6 billion) previously.

“Following the increase, there will be an additional budget for KUR interest subsidy of 7.6 trillion rupiahs ($539.2 million) next year,” he said.

Also read: Cash Transfers for Indonesian MSMEs to be Extended to Next Year

As of December 21, KUR distribution has reached 188.11 trillion rupiahs ($8.3 billion), or about 99 percent of this year’s target at 190 trillion rupiahs ($13.4 billion).

The microcredit program has been distributed to about 5.81 million borrowers, with an outstanding loan balance of 226.5 trillion ($16 billion) and non-performing loans (NPL) at 0.63 percent.

“KUR distribution to the MSME sector helps the business rise quickly during the pandemic. Therefore, the government will continue its support so that MSMEs can take full advantage of their role as economic drivers,” said Airlangga.

(Writer: Rully R. Ramli | Editor: Bambang P. Jatmiko)

Source: https://money.kompas.com/read/2020/12/29/064500126/pemerintah-tambah-besaran-dan-perpanjang-subsidi-bunga-kur-hingga-2021-.