The government has launched efforts to increase access to financing sources for Micro, Small and Medium Enterprises (MSMEs) in order to increase national economic growth. One of them is through the People’s Business Credit (KUR) program. The KUR program is a good step for economic progress by providing capital assistance for MSMEs in the form of loans or credit. Given that MSMEs are an important part of providing the wheels of the national economy and providing employment. Well, for KH pals who may currently be starting their own business and need access to capital, you can try the KUR program which is indeed made with convenience in terms of loan time limits (tenor) and interest. If you are interested in learning more about KUR, please refer to the following article.
What is KUR?
Simply put, Kredit Usaha Rakyat or KUR is working capital or investment financing intended for MSMEs in productive businesses. This financing is channeled through a predetermined channeling bank with a guarantee pattern. This program aims to provide support to MSMEs that are considered productive, but still need an injection of capital to develop further. The areas covered by this program are various forms of business, including agriculture, industry, forestry, fisheries and marine, as well as savings and loan services. In fact, the KUR funds that are channeled entirely come from the funds of the channeling banks. The government’s role is to provide guarantees. Therefore, MSMEs that obtain access to KUR are obliged to repay it by paying installments according to the agreed interest rate and time period.
Goals and benefits of KUR for MSMEs
This year, the government is ready to disburse KUR funds amounting to Rp415 trillion from the previous year’s Rp373 trillion. Even now, related to the form of KUR financing, the government has set an interest rate of 3 percent for super micro KUR and single digit interest for micro KUR. Not only does the government offer low credit interest rates starting from 3 percent, it also asks KUR channeling banks to provide relief, in the form of free collateral for micro and super micro debtors. The relief is contained in the Coordinating Minister for Economic Affairs Regulation No. 1 of 2023, which was issued at the end of January. Through KUR funds, as stated by Coordinating Minister for the Economy Airlangga Hartarto, the public is expected to utilize them for capital for MSME players in the context of implementing policies to accelerate real sector development and empower MSMEs. In addition, here are some other benefits of the KUR program for MSMEs:
Easy Access to Funding
One of the obstacles faced by MSMEs is limited access to sufficient funding sources. The KUR program provides a solution by providing loans with easier and lighter requirements. This allows MSMEs that previously found it difficult to obtain funding from conventional financial institutions to access funds to grow their business.
Business Development and Innovation
Through the KUR program, MSMEs can use the funds obtained to expand their business. This includes production expansion, product diversification, investment in new technology and equipment, and the development of business innovations. As such, MSMEs can increase their competitiveness in the market.
Productivity and Quality Improvement
With funding from the KUR program, MSMEs can improve the productivity and quality of their products or services. The available funds can be used to train employees, update equipment and adopt more efficient management practices. This has a positive impact on the reputation of MSMEs and helps them gain consumer confidence.
Driving Local Economic Growth
MSMEs generally operate at the local and regional level. By supporting the growth of MSMEs through the KUR program, the government is also encouraging economic growth at the local level. The income generated by MSMEs will have a positive impact on the economy of the surrounding region. With these benefits, the KUR program has proven itself to be an effective tool in supporting the growth of MSMEs in Indonesia.
Requirements and Criteria for MSMEs Receiving KUR
The KUR program is intended for MSME players consisting of:
- Micro Business: Businesses that have a turnover of less than IDR 50 million per year.
- Small Business: Businesses that have a turnover of between IDR 50 million and IDR 500 million per year.
- Medium-sized Enterprises: Businesses that have a turnover of between IDR 500 million and IDR 5 billion per year.
To get KUR, MSME players must fulfill the conditions set by the government, including:
- Indonesian citizen (WNI) who is at least 18 years old
- Have a business that has been running for at least one year
- Not currently classified as a Bank Indonesia debtor list
- Has a Taxpayer Identification Number (MSME)
- Has a valid Company Registration Certificate (TDP) or Business License Letter
- Have a savings account at a bank registered with Bank Indonesia
In some cases, MSME entrepreneurs are also required to provide collateral in order to obtain KUR. The collateral is usually an asset owned by the entrepreneur, such as land, a house, or business equipment.
Then, what steps should MSMEs take to get KUR?
Now, KH friends have understood what criteria and requirements must be met by MSME players to apply for the KUR program. Furthermore, to get the business credit, there are several things that KH Friend can do, among others:
Create a Business Proposal
The first step is to create a business proposal that explains in detail about the business, including goals, budget, and profit projections.
Find out lending requirements and policies
Each bank or financial institution may have different requirements and policies regarding the granting of KUR. Make sure you understand the requirements such as the minimum and maximum loan amount, the time period, and the type of collateral required.
Find out the interest rate and other fees
Interest rates and administrative fees may differ between banks or financial institutions. So, you need to find out about these fees and how they will affect the total cost of your loan.
Make sure you have a guarantee that you can provide
KUR generally requires collateral as a form of security for banks or financial institutions. Make sure your KH buddy has assets or collateral that can be given as a loan guarantor. This can be in the form of property, vehicles, or other valuable assets.
Apply for Credit to Several Banks or Financial Institutions
Don’t stick to just one bank or financial institution. It is better to apply to several banks or financial institutions that have this program. This will give you a better chance of getting approved, as well as give you the option to choose the best one for your needs. In addition to the steps above, it is also important to have complete business legality documents. Legality is an absolute requirement in applying for KUR.
ALSO READ: 10 Million MSMEs targeted to have NIB in 2023, what is the importance?
The legality required includes a business license (IUMK), Business Identification Number (NIB), NPWP, SIUP, and other documents that show that your MSME is legally valid.
KH Contact
That is the explanation of KUR, starting from the definition, objectives and benefits, as well as the requirements and steps to obtain it. It is undeniable that financial resources from this program can indeed help grow businesses, expand operations or develop new products and services. Well, if Sobat KH is also a business actor who wants to get access to funding through KUR, you can consult and ask for help through Kontrak Hukum. We have been trusted by more than 5 thousand businesses in Indonesia to meet their needs, including the fulfillment of legal documents that facilitate KUR applications. The services provided include making IUMK, NPWP, and NIB. No need to worry because legality services at Kontrak Hukum are guaranteed to be easy and affordable, making it suitable for MSMEs! For ordering information, please visit the KH Services – Licensing and Taxation page. You can also consult with us Ask KH and via direct message (DM) to Instagram @kontrakhukum.
