Menkop Teten: KUR Cluster Distribution Reaches IDR 538.7 Billion, JAKARTA — The Minister of Cooperatives and SMEs Teten Masduki stated, the ministry is trying to accelerate the distribution of supply chain-based Cluster People’s Business Credit (KUR). He mentioned, until now a KUR Cluster of IDR 538.7 billion has been realized, distributed to 50 clusters with 5,310 Micro, Small and Medium Enterprises (UMKM) cluster members by nine KUR distributors.

It is hoped that financial institutions can expand the KUR Cluster scheme. In total, he said, the expectation for supply chain-based KUR Cluster distribution is Rp 1.34 trillion for 117 clusters with 15,776 MSMEs cluster members.

“Therefore, it is important to carry out breakthrough efforts, including through the supply chain-based KUR Cluster program. This is part of an effort to increase access to credit distribution for people in the economy,” he said in the handover of the supply chain-based KUR Cluster at the Office of the Ministry of Cooperatives and SMEs (Kemenkop), Jakarta, Wednesday (12/4/2023).

He explained that the KUR Cluster distribution was part of the government’s breakthrough in increasing the role of the people’s economy as a driver of national economic growth. In this supply chain-based cluster distribution, the distribution of financing shifts from the trade sector to production sectors such as agriculture, plantations, fisheries, livestock, and others.

“We were asked to find a breakthrough so that KUR distribution would not be just the same. But we also understand that banks don’t want to be hasty in distributing KUR, this year’s KUR distribution is targeted at IDR 460 trillion,” he said.

The risk of bad credit or Non-Performing Loans (NPL), he continued, is the main consideration for banks. Thus, the distribution of KUR Clusters is considered to reduce this risk, because MSME production goods are definitely absorbed by off takers.

This also allows MSMEs to be connected with industry supply chain off takers such as the MSME benchmarks in Japan, South Korea (South Korea) and China, where MSME banking loans can reach more than 60 percent. “The best is in South Korea, bank credit reaches 81 percent of bank credit for MSMEs. MSMEs there are connected to the supply chain of the semi-finished material industry for industrial materials there is market certainty, this is what is being built,” he said.

He emphasized that the Ministry of Cooperatives continues to expand the KUR Cluster, whose ceiling is quite large, reaching IDR 500 million, so that it can accelerate distribution. On the other hand, Teten suggested that banks should not only use conventional collateral approaches, using guarantees. He added that not all MSME assets can be used as collateral.

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