KUR involves multifinance, could Rp 8 T per month

JAKARTA. Several multi-finance companies will soon enjoy a new role as lenders in the people’s business loan (KUR) program, despite their non-bank status, as part of the government's efforts to disburse at least Rp 8 trillion (US$578.7 million) of KUR per month.

Financial Services Authority (OJK) chairman Muliaman Hadad said the institution had selected multi-finance companies that complied with certain requirements in terms of financial strength and business portfolio.

"It starts this year. Tomorrow, we will submit the names of the multi-finance companies," he said after a limited meeting at the State Palace in Jakarta on Thursday, adding that those companies had to be in a healthy condition and have sufficient experience in micro loans.

Earlier, the government allocated disbursement targets for each participant in the subsidized loan program. State-owned lender Bank Rakyat Indonesia (BRI) remains dominant with a mandated KUR disbursement of Rp 67.5 trillion.

Bank Mandiri comes second with a mandated KUR disbursement of Rp 13 trillion, followed by Bank Negara Indonesia (BNI) with Rp 12 trillion. Private lenders, including the forthcoming multi-finance companies, are expected to disburse Rp 4 trillion.

"The KUR portion for those multi-finance companies will be adjusted according to their ability, as they are new finance institutions [in joining the program]," he said, adding the possibility that regional development banks (BPD) could join in KUR distribution.

Coordinating Economic Affairs Minister Darmin Nasution said the disbursed KUR in January, on a month-to-date basis, was around Rp 6.5 trillion to Rp 7 trillion.

"Our target is Rp 100 trillion [in 2015], it means Rp 8 trillion must be disbursed every month. Currently we have Rp 6.5 trillion to Rp 7 trillion [disbursed] in January," he said.

Meanwhile, Bank Indonesia Governor Agus Martowardojo applauded the reduction in the KUR interest rate from the previous 21 percent to 9 percent, calling it "a breakthrough" for supporting small and medium enterprises. (Ayomi Amindoni)