CARITAU JAKARTA – Minister of Cooperatives and SMEs (MenKopUKM) Teten Masduki said it was time to evaluate the People's Business Credit (KUR) scheme which was deemed no longer effective. KUR

"I think it's time for KUR to be evaluated because it is less effective," said Teten during the 2023 Reflection and 2024 Outlook Discussion of the Ministry of Cooperatives and SMEs in Jakarta, Thursday (21/12).

The Coordinating Minister for SMEs said that one of the reasons why KUR has not been realized optimally or has only reached 84.28 percent is because the distribution scheme is less effective.

"The KUR distribution scheme using collateral as collateral is no longer appropriate because SMEs, especially micro and small scale, do not have sufficient collateral," he added.

He considered this to be a barrier for MSMEs to access KUR. In fact, the Indonesian economy is dominated by MSMEs, providing up to 97 percent of employment opportunities.

“But banking financing is mostly for corporations. "(MSMEs) are 21 percent now and no one considers this a problem," he said.

Teten also compared banking credit distribution to MSMEs in other countries, such as South Korea, where the portion for MSMEs reaches 80 percent. Likewise with Japan and India which are above 60 percent.

According to him, one effective financing distribution mechanism is a credit scoring scheme where banks use applications to help carry out scoring or ranking.

The credit scoring scheme, he continued, has been implemented in 145 countries. Schemes without using collateral have also been used by financial technology or fintech which uses technology to find out the exact criteria for prospective customers who will be given financing.

Fintech is even able to provide loans of up to IDR 2 billion to MSMEs without collateral and loans of up to IDR 10 billion to MSMEs that are connected to the Goods Procurement Policy Institute (LKPP).

"We offer that you should use credit scoring and banks don't have to invest anymore. "There are many private companies, applications that can help banks carry out scoring or ranking," he said.

As for December 21 2023, KUR realization reached IDR 250.3 trillion or 84.28 percent of the set target.

The KUR was given to 4.48 million debtors, of which 42.39 percent were debtors with businesses in the wholesale and retail trade sectors. (HAP)