INDONESIA’S Deputy Coordinating Economic Minister for Macroeconomic and Finance, Iskandar Simorangkir, has said the government has allocated 120 trillion rupiah (US$8.39 billion) for micro credit programme Kredit Usaha Rakyat (KUR) this year, higher than the 106.6 trillion rupiah 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 per cent this year from 9 per cent 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 95.6 trillion rupiah as of Novemebr 30, last year, reaching 89.6 per cent of the target.
“[The disbursement] by the end of 2017 was expected to reach nearly 100 trillion or above 90 per cent,” Iskandar said, adding that the government disbursed 94.3 trillion rupiah in KUR micro credits in 2016.
KUR is a government programme 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.