The development of People’s Business Credit (KUR) in
the past few years was worthy of observation. Not just in terms of KUR value to
be pipelined, but also two other aspects which were not less important, i.e.
stipulation of KUR interest and KUR allocation.
This year the Government sets target of KUR
pipelining at Rp 36 trillion, increasing by 5.88% against realization of 2012 at
Rp 34 trillion. The composition being, BRI Rp 19 trillion, BNI Rp 4.7
trillion, Bank Mandiri Rp 3.6 trillion, Bank Bukopin Rp 450 billion, Bank
Syariah Mandiri Rp 1.5 trillion, BNI Syariah Rp 200 billion; Bank Tabungen
Negera (BTN) Rp 1.2 trillion and 26 Regional Development Banks (BPD) Rp 5.25
trillion.
About the now SKIM interest, the banking industry
did not feel disadvantaged by the Government in applying flat interest for
KUR. Some bankers stated that, the stipulation of bank interest had been
discussed in the working team and was still advantageous to banks.
The Government was applying new standard of bank
interest calculation for KUR this year, i.e. flat interest to be imposed
monthly. The size was 0.95% for micro business and 0.57% for retailers. On annual
basis the KUR interest was only 11.4% and retail KUR 6.84%. This year the
Government set effective interest for KUR at 20% - 21% per annum and retail credit
effective at 12% - 13%.
Although seemingly low, interest calculation
on flat basis had its plus and minus points. By applying flat interest, the.
bank set fixed installment throughout the payment period. Interest calculation
did not refer to the rest of debt unpaid. The scheme was very much like credit
for automotive. On the contrary, by applying effective scheme, installment and
payment referred to remaining debt.
If directly multiplied, it was apparent that flat-based
interest was lower than effective credit interest. But in reality afield the
profit interest was not too far different. The scheme could over bank's cost
and margin, the point was there was surely no bank who were willing to bear
loss it the skim was not profitable to bank.
In stipulating installment, the bank would calculate
all limit of customer’s credit multiplied by interest. Meanwhile in the
effective system, interest was based on credit being liquidated not credit
Limit. An example was a customer taking credit of Rp 300 million. In the flat
system, if the liquidated credit was only Rp 200 million, the amount to be
interest-imposed was only the amount used. The flat interest system was
suitable for customers having stable need while the effective system was for customers
whose need to fund was fluctuative.
According to barkers the flat interest system was
suitable for customers who needed short term KUR; while long term credit was best
to be based on effective interest. The policy was Only a matter of payment
scheme.
Not less important was that KUR provider banks must
be keen in allocating KUR credit to the upstream sector. As known, so far
credit extension was more on the downstream sector, especially trading. Nearly
60 percent of KUR allocation was for the trading sector. This was not
prohibited, but if this were let to continue, without being realized KUR allocation
for the trading sector would continue to soar high. This was indeed not
healthy.
According to the spirit at people's economic
financing, supposedly KUR allocation was driven to the upstream sector,
especially agriculture. Only trouble was, this sector absorbed lower KUR.
It was understandable that the banking sector
preferred to channel out KUR to the trading sector; while the risk was easily
anticipated, the profit-and loss calculation was also easy to exercise. Meanwhile
to finance the financing sector, while the risk was higher the profit and loss
calculation was also more difficult.
Therefore the Government through the Coordinating
Minister of Economy, the Coordinating Minister of People's Welfare and Minister
of Cooperatives must persuade banks to channel out KUR Credit to the upstream
sector. The Government was advised to monitor the execution of KUR credit by
each respective banks in terms of volume, number of debtors or the sector being
financed. It was also important to prevent double gain: one KUR creditor receiving
KUR credit from one bank receiving again another KUR from another bank.
There were still many farmers, growers, fisherman
and embankment operators who needed financial support from banks as they were
having difficulty in developing their business. The KUR program was rated as
suitable and appropriate to fulfill their need. About the high risk, banks had
no reason to make excuses because the Government had appointed the KUR Deposit
Insurance, i.e. PT Jaminan Kredit Indonesia and PT Asuransi Kredit Indonesia
(Askrindo).
The two credit insurance companies already had
Government's mandate to guarantee in case of non performing loan to compensate
the loss borne by banks. Thereby their should be no excuses for banks to refuse
financing the upstream sector.
Even if the trading sector absorbed more KUR, it was
still necessary to make sure that the commodities being traded were agriculture-based.
Hence there was connectivity between the upstream sector and the downstream
sector.
Indonesia being an agricultural and marina state, it
seemed very appropriate if KUR credit were more upstream-oriented rather than
downstream-oriented. The emergence of young entrepreneurs in Indonesia who
craved for bank's financial support could be the target of KUR-provider banks.
The KUR provider banks must have their concern and commitment to build the
agree-based upstream sector in the broadest sense of the word as their finance
resources.
Relocation of the KUR to the upstream sector created
great impact. Creation of employment opportunities could be realized. Equal
distribution of development could be more feasible as financial institutions
were more accessible. People's drive to migrate form rural areas to urban
centers could be minimized as the regions had economic potentials of their own.
Regional economy would be mare vigorous as well so
regional and national GDP would increase, which boiled down to prosperity of
the local communities. Again it was not for the Government to take pride in the
successful pipelining of KUR, the Government should be proud if they could
successfully drive KUR to the upstream sector.
Business News - February 13,2013
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