Govt Mulls Over Integrating KUR and Preemployment Card

The majority of preemployment card recipients have opened their own businesses. The government will provide support for their businesses to expand the number of entrepreneurs.

KOMPAS/COKORDA YUDISTIRA

The couple making various cakes and snacks in Denpasar, Bali, I Made Artama and Lilik Listiyorini (center), together with representatives from BRI Bank Denpasar, Tuesday (12/1/2021). Artama and Lilik are BRI\'s customers for microcredit program (KUR) in Denpasar.

JAKARTA, KOMPAS– The government is mulling over a plan to support preemployment card recipients under the microcredit program (KUR). In integrating the KUR and preemployment card programs, the government hopes to increase the number of new entrepreneurs in the country.

The government has allocated a 2021 KUR budget of Rp 253 trillion (US$17.7 billion), a 33.15 per-cent increase from last year’s budget of Rp 190 trillion.

According to data provided by the Office of the Coordinating Economic Minister, the government disbursed a total of Rp 196.42 trillion in KUR as of 31 Dec. 2020, or 103.3 percent of the 2020 target. The largest contributor was KUR for micro enterprises, which provided loans worth Rp 128.49 tril-lion.

The data also shows that KUR target and realization increased significantly from year to year since 2015.

The target is to increase the number of new entrepreneurs by 4 percent by 2024.

Rudy Salahuddin, the deputy for digital economy, manpower, and micro, small and medium enterprises (MSMEs) development at the coordinating minister’s office, said that the decision to integrate the KUR facility with the preemployment card aligned with the government’s policy to increase the number of entrepreneurs in the country.

“The target is to increase the number of new entrepreneurs by 4 percent by 2024, while boosting the share of entrepreneurs to the total population to 3.9 percent,” Rudy said in a written statement issued on Sunday, adding that the ratio was currently 3.47 percent.

Also read: Overhauling Pre-Employment Card Urgent

The figure is still below that of neighboring Southeast Asian countries, such as Thailand at 5 percent and Singapore at 9 percent.

KOMPAS/KRISTIAN OKA PRASETYADI

Tjahyani (56), a micro entrepreneur from Manado, North Sulawesi, shows jewelry with a pendulum made from red snapper scales in the living room of her house, Tuesday (12/1/2021). Tjahyani developed her business, one of which was from the microcredit program BRI.

Rudy added that the government’s preemployment card survey found that 35 percent of jobless program recipients had landed new jobs after completing the training program. However, only 19,500 out of 5.98 million program recipients had opened their own businesses.

The government was therefore considering supporting preemployment card recipients who need financial support by providing them with the KUR facility. It hoped that the KUR facility could help the recipients improve production capacity and improve their economies of scale.

Also read: Unemployment Expected to Increase Further

“If preemployment card recipients want to increase their product quality and production scale, they will need additional capital, so [we hope that] the KUR could contribute to improving their business scale in the future,” said Rudy.

Digitizing KUR disbursements

Spokesperson Aestika Oryza Gunarto of state-owned lender Bank Rakyat Indonesia (BRI) said that the bank had disbursed Rp 11.36 trillion in microcredit to 400,000 debtors in January, in cooperation with e-commerce platforms like Tokopedia and Shopee.

The January loan disbursements accounted for 6.68 percent of BRI’s target quota for this year. Aestika added that digitizing KUR disbursements presented a new growth opportunity, and that the strategy would improve access to the microcredit program.

“Through cooperation with e-commerce platforms and the use of big data, it is easier for BRI to con-duct debtor assessment and find low-risk borrowers,” he said.

KOMPAS/WISNU WIDIANTORO

The training offered on the skillacademy.com page is related to pre-employment cards. Photo taken in Jakarta, Tuesday (16/6/2020).

Meanwhile, small business general manager Bambang Setyatmojo at state-owned lender Bank Negara Indonesia (BNI) said that the bank had disbursed Rp 1.6 trillion in KUR as of 31 Jan. BNI had received a KUR quota of Rp 32 trillion this year, up Rp 10 trillion compared to last year’s quota.

“Following the increase in the KUR quota, BNI will actively expand its reach by developing partner-ships with digital platforms such as Gojek, Grab, Shopee, and Tokopedia,” said Bambang.

Data at the Office of the Coordinating Economic Minister shows that 46 financial institutions are au-thorized to distribute the KUR.

MSME competitiveness

On another occasion, Supply Chain Indonesia (SCI) chairman Setijadi said the country’s supply chain needed improvement from the upstream to the downstream to boost the competitiveness of Indo-nesian MSMEs. Collaborating with MSMEs could significantly increase their production scale.

Logistics service providers also needed to improve efficiency. “The supply chain of some commodities needs to be shortened,” Setijadi said on Sunday.

Also read: Preemployment Card, Prioritize Affected Workers

The vice chairman for export development at the Indonesian Chamber of Commerce and Industry (Kadin), Handito Joewono, who also heads the Indonesia Export School, explained that digital tech-nology opened consumer-to-consumer (C2C) export channels. Hence, the government should open channels for Indonesian MSMEs to sell their products directly to foreign buyers.

This article was translated by Lionel Priyadi.