Small Business Credit Interest Slashed to 7% Next Year

Sunday, 12 November 2017 , 15:00:00 WIB -

Coordinating Minister for the Economy, Darmin Nasution, is seen presenting Indonesiaâs economic progress under the Jokowi-JK Administration, Jakarta, Tuesday (Oct.17) (ANTARA)

JAKARTA, GRES.NEWS – The government will cut the benchmark interest for Small Business Credit (KUR) from 9 percent to 7 percent as of 1 January 2018. The announcement came from the Coordinating Minister for the Economy, Darmin Nasution, who said the government intends to support micro, small and medium enterprises (MSME) in obtaining credit.

"We have begun to move (to support such businesses) by introducing 7 percent benchmark interest for Small Business Credit," Darmin said, Jakarta, Friday (Oct.27).

In the same meeting that resulted in the interest cut, the government has also decided to support distribution of Small Business Credit to the production sector, particularly crop cultivation, fishery, food processing, construction and production service industries in 2018, with the targeted minimum credit distributed to said sectors raised to 50 percent from the Rp120 trillion allocated.

Darmin explained MSMEs have been finding difficulty obtaining credit from financial institutions as the production sector is more risky than the trade sector.

"Small Business Credit distribution must be directed more to the production sector, so that micro, small and medium businesses can benefit from the low interest program that the government has launched," he said.

To accelerate credit distribution in the sector, the government will launch a new Small Business Credit schemes: Special Small Business Credit (KUR Khusus) that will distribute credit to small plantations, cattle farms and traditional fishermen with a ceiling of Rp25 million-Rp500 million. (dtc/rm)