VOI - Voice of Indonesia | RRI - Radio Republik Indonesia

The government has decided to provide salt farmers with government-subsidized bank loans for small and medium enterprises known as KUR credit scheme to encourage the people`s salt and self-sufficiency programs.

"The government needs to facilitate funding and financing for the salt production program through the KUR scheme," Deputy of Macroeconomics and Finance at the Coordinating Ministry of Economic Affairs Iskandar Simorangkir stated in Jakarta on Wednesday.

Simorangkir explained that the granting of KUR credits aims to assist the financing of salt farmers whose endeavor is categorized as a small business and not as a salt extraction in the mining sector.

"The government is striving to provide KUR credit for salt farmers," he said.

Earlier, the salt commodity sector, based on the classification of the commercial bank`s business field, was included as one of the sectors in the mining businesses. According to Regulation of the Coordinating Minister for Economic Affairs No. 11 of 2017 on KUR`s implementation guidelines, the mining sector is not included in the sectors that could receive KUR credits. Since 2015, the distribution of KUR to salt farmers has reached Rp1.1 billion, but interest subsidies have not been paid since this sector is not included in the KUR financing program sectors.

The overall distribution of KUR loans for salt commodities recorded a five percent NPL ratio. Hence, special supervision is needed on credit financing for this commodity. On this occasion, the government also decided to allocate KUR credits for 13 business activities in the tourism sector to encourage the entry of foreign exchange into Indonesia. For the addition of this KUR allocation, Simorangkir noted that the government had increased KUR allocation for 2018 from Rp117 trillion to Rp123.53 trillion.

The addition of KUR in 2018 is decided based on considerations as recommended by the Financial Services Authority. The Financing Policy Committee for ultra-, micro-, and medium-scale businesses hopes that it would help UMKM access financing with affordable interest rates.

Until July 2018, the realization of KUR`s distribution has reached Rp79.2 trillion, or 67.6 percent of the Rp117 trillion target. This KUR distribution includes 3,209,569 debtors with non-performing loans at only 0.01 percent. ( ant )