Government Targets for KUR Distribution of Rp. 470 Trillion by 2023

Coordinating Minister for the Economy Airlangga Hartarto. PHOTO: Coordinating Ministry for the Economy

The government has officially set a target for distributing People’s Business Credit (KUR) of IDR 470 trillion for 2023 and IDR 585 trillion for 2024. This was confirmed by the Coordinating Minister for Economic Affairs.

This is to accelerate the expansion of access to KUR financing for MSME actors who are unbanked and affected by the pandemic, as well as to help fulfill the MSME loan ratio which is targeted to reach 30% of total lending by 2024.

This figure is up from the KUR ceiling this year. In 2022, the government has sought to expand access to easy and cheap financing for MSME players by setting a KUR ceiling of IDR 373.17 trillion.

Until now, the distribution of KUR for the First Quarter of 2022 has reached Rp. 93.34 trillion with a contribution to Gross Domestic Product (GDP) of 2.08% and is projected to increase significantly with the distribution of KUR in June 2022 of Rp. 179.67 trillion.

“KUR distribution has a positive impact on increasing economic growth, which in 2016 contributed 0.76% of GDP to 2.08% of GDP in Quarter I-2022. KUR also contributed to the absorption of new workers which in 2021 succeeded absorb 12.6 million workers,” said Coordinating Minister for the Economy Airlangga Hartarto in a Coordination Meeting related to the Evaluation of the Implementation of KUR Distribution in Semester I 2022 at the Office of the Coordinating Ministry for the Economy, Friday (22/07).

Based on the discussion at the meeting, the distribution of KUR in June 2022 increased significantly and reached 41% (YoY) compared to June 2021, so the Government is optimistic that it can achieve the projected KUR distribution target in 2022 of IDR 373.17 trillion.

The total outstanding KUR from August 2015 to June 30, 2022, was IDR 507 trillion and was given to 35.96 million debtors.

“Considering that there are still KUR debtors who ask for relaxation because their business activities have not fully recovered, the relaxation of MSME loans is proposed to be extended until April 2024,” said Coordinating Minister Airlangga.