Banks are expected to continue disbursing government-sponsored micro loans (KUR) next year, as demand keeps growing.
According to Anak Agung Gede Ngurah Puspayoga, Cooperatives and Small and Medium Enterprises Minister, the government is looking to maintain the KUR project, which was initiated by the previous administration in 2007.
“The demand [for KUR] is there and we need to continue conducting the program because we have not reached all potential recipients,” he said after attending a coordination meeting on KUR with Coordinating Economic Minister Sofyan Djalil.
The meeting was also attended by Industry Minister Saleh Husin, Trade Minister Rachmat Gobel, Bank Indonesia’s (BI) executive director of payment system policy and monitoring Eny Panggabean and State-Owned Enterprise (SOE) Ministry’s deputy for business services Gatot Trihargo.
The government plans to increase the upper limit of the loans as well to Rp 25 million (US$1,938) per customer from the current Rp 20 million in its effort to reach around Rp 74 trillion in total disbursed in 2015.
“We hope to focus the loan disbursement to farmers and fishermen, in line with the government’s maritime policy,” Puspayoga said.
Data from the KUR committee show that the list of participating banks consists of five commercial lenders, two sharia lenders and 26 regional development lenders (BPDs).
The five commercial lenders are state lenders Bank Rakyat Indonesia (BRI), Bank Mandiri, Bank Negara Indonesia (BNI), Bank Tabungan Negara (BTN) and private lender Bank Bukopin.
As of October 2014, the outstanding KUR amounted to Rp 50.39 trillion, channeled to 12.12 million customers with an average loan of Rp 14.2 million per person. The average non-performing loan (NPL) ratio stood at 4.1 percent, close to the 5 percent benchmark set by banking regulator.
The data also show that BRI contributed the most to the KUR disbursement with more than 60 percent, followed by Mandiri with 12.9 percent.
Gatot Trihargo of SOE Ministry said that the participants in the meeting agreed to ask the Financial Services Authority (OJK) to conduct evaluation on banks, whose NPL ratio has exceeded the 5 percent benchmark.
“It will depend on the evaluation results, whether or not they will be allowed to continue participating in the program,” he said Monday.
BRI director for micro, small and medium enterprises Djarot Kusumayakti said that so far the bank had exceeded the target set for this year.
“We aim to disburse Rp 20 trillion-worth of KUR in 2014. According to our data, the loan realization has overshot the target by 129 percent as of November,” he said.
Meanwhile, BNI business banking director Krishna R. Suparto said that the state lender might only book 60 percent of the Rp 5 trillion target set for 2014.
“Our system is not designed to channel micro loans, so we have to partner with other financial institutions, such as BPR [rural banks] and cooperatives,” he said.
By the end of October, BNI’s outstanding KUR portfolio reached Rp 3.39 trillion, with a NPL ratio of 3.1 percent. Commenting on next year’s higher target, Krishna said that it would have to reevaluate its strategy to be able to better channel the loans.
Separately, Hermawan, Mandiri business banking II group head, said that an increase in the KUR target would have to be equipped with better infrastructure and networks among lenders. “The number of participating banks may have to increase as well to support the target,” he said.
Mandiri’s own data show that it had channeled more than 85 percent — equal to Rp 3.06 trillion — of this year’s target as of Dec. 12. Similar to BNI, it also partners with third parties for the program, disbursing the loans to micro training groups of its corporate banking clients.
SOURCE: The Jakarta Post
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