The government, through the Coordinating Ministry for the Economy (Kemenko Ekonomi), has finally officially waived interest payments and postponement of the principal installments of People’s Business Credit (KUR), for businesses affected by the corona virus (Covid-19) for a maximum of 6 months.
The exemption from interest payments and postponement of KUR principal payments will also be followed by relaxation of the KUR provisions by providing an extension of the term and additional ceilings.
This policy was decided at the MSME Financing Committee Coordination Meeting (Coordination) on Wednesday (8/4/2020). The coordination meeting was chaired by the Coordinating Minister for Economic Affairs as Chair of the UMKM Financing Committee, and was attended by the Minister of Cooperatives and MSMEs, the Minister of Marine Affairs and Fisheries, and the Minister of Manpower.
In addition, there were also the Minister of Industry, Minister of Trade, Deputy Governor of Bank Indonesia, Deputy Chairman of OJK, Head of BPKP and Echelon 1 officials representing the minister as members of the UMKM Financing Committee.
“This policy comes into effect on April 1, 2020. Those who will receive interest exemption and postponement of KUR principal installment payments for a maximum of 6 months, must fulfill the assessment of their respective KUR distributors,” said Coordinating Minister for the Economy Airlangga Hartarto after a meeting via video conference, in Jakarta. , Wednesday (8/4/2020).
This decision is a follow-up to the decision of the Limited Ministerial Meeting on March 20, 2020, in which the President of the Republic of Indonesia Joko Widodo (Jokowi) has emphasized that a postponement of principal and interest payments has been imposed for all KUR schemes affected by Covid-19 for 6 months.
This is further strengthened by the Financial Services Authority Regulation (POJK) Number 11 / POJK.03 / 2020, which, among other things, states that credit or financing restructuring is carried out on credit or financing given before or after the debtor is affected by the spread of Covid-19, including debtors. UMKM.
Airlangga said, for existing KUR debtors who were affected by Covid-19, they would be given relaxation of the KUR restructuring provisions with a policy to extend the KUR period, and / or a policy to increase the KUR ceiling limit (especially for non-Production KUR Small and Micro KUR debtors).
Meanwhile, for new KUR debtor candidates, they will be given relaxation to fulfill the administrative requirements for KUR application, such as a business license, taxpayer identification number (NPWP), and additional collateral documents. All documents are temporarily suspended until conditions permit. They can also access KUR online.
The criteria for KUR recipients who receive special treatment are as follows:
(a) Credit quality as of 29 February 2020, namely:
(i) collectability of performing loans (collectability 1 and 2) and not currently in the restructuring period; or
(ii) collectability of performing loans (collectability of 1 and 2) and during the restructuring period, a stimulus can be given on condition that the restructuring runs smoothly in accordance with the restructuring PK and does not have arrears of interest on funds or principal; and
(b) Be cooperative and have good faith.
KUR recipients reduce the decline in business due to at least one of the conditions such as:
(a) The business location is in the Covid-19 affected area announced by the local government;
(b) There has been a decrease in income or turnover due to interference with Covid-19; and
(c) There was a disruption to the production process due to the impact of Covid-19.
The Coordinating Ministry for Economic Affairs noted that the total accumulated KUR distribution from August 2015 to February 29 2020 was IDR 507.00 trillion.
The outstanding was recorded at IDR165.30 trillion and the ratio of Non-Performing Loans (NPL) or non-performing loans was 1.19%. KUR disbursement as of February 29, 2020 has reached IDR 35.00 trillion or 18.42% of the 2020 target of IDR 190 trillion.
The portion of KUR distribution in the production sector (non-trade) until February 29, 2020 is 57.30% or IDR 20.05 trillion. The highest distribution of KUR to the production sector is the agricultural sector (28%), services (16%), and the manufacturing industry (11%).
Previously, the Minister of Finance (Menkeu) Sri Mulyani Indrawati emphasized that as many as 11.9 million micro, small and medium enterprises (MSMEs) and 22,000 TKI (Indonesian workers) would get KUR principal and interest postponement facilities.
Not only that, Sri Mulyani emphasized that the relaxation was also for agricultural sector credit, and postponement of installments and interest for Ultra Micro Financing (UMi) and Mekaar loans.
UMi is an advanced stage program from a social assistance program to business independence that targets micro-enterprises at the lowest level, which cannot yet be facilitated by banks through the KUR program. The Mekaar program is a business capital loan for underprivileged women managed by PT Permodalan Nasional Madani (Persero) or PMN.