KREDIT USAHA RAKYAT SME FINANCING THROUGH CREDIT

GUARANTEE SCHEME :
INDONESIA EXPERIENCE
by Bobby Hamzar Rafinus
Deputy for Fiscal & Monetary Coordination
Coordinating Ministry for Economic Affairs
Republic of Indonesia

The views expressed in this presentation are the views of the author and do not necessarily reflect the views or policies of the
Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they
represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any
consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.

JAKARTA, 16 OCTOBER 2014

OUTLINE
1. INTRODUCTION
2. KUR SCHEME
3. ROLE OF GOVERNMENT
4. PERFORMANCE OF KUR
5. KUR EVALUATION

INTRODUCTION

SME EMPOWERMENT
Presidential Instruction Number 6/ 2007 : Accelerating the Development of Real
Sector Policies and the Empowerment of MSMEC (Micro, Small and Medium
Enterprise plus Cooperative) has been issued to enhance economic growth,
provide job opportunity, and reduce poverty.
MSMEC Empowerment Policy includes:

Improvement in financing access

Entrepreneurship Development
Market Improvement for SMEC products
Reform on SMEC regulation

LIMITATION OF MSMEC:
Capability of Human Resources
Market Coverage and Networking
Technology Capability
Financing access from banks
The ability of SMEs to provide collateral

STRUCTURE OF INDONESIA ENTERPRISES

CONDITION

Entitle go public

BIG
ENTERPRISES 4,950
(0,01%)
MEDIUM
ENTERPRISES
44,280 (0,08%)

FEASIBLE AND BANKABLE

SMALL
ENTERPRISES

602,190 (1,01%)
FEASIBLE BUT NOT
BANKABLE 16,36 mil (30%)
NOT FEASIBLE
AND NOT
BANKABLE
38,19 mil (70%)

MICRO
ENTERPRISES

54,55 million
(98,85%)

6
Source: compile from various sources

IMPROVEMENT ON FINANCING ACCESS

To improve financing access and cope with the constraints of
MSEs to provide collateral, government launch Kredit Usaha
Rakyat (KUR) program in end of 2007.
KUR is a credit / financing for working capital and or
investment for productive, feasible, non-bankable MSEs. Its
credit limits to Rp. 500 M (USD 42.000) which is partially
guaranteed by the Government through the Credit Guarantee
Company.
7

KUR TARGET
KUR target is a productive, feasible, non-bankable business
(approximately 16,36 million MSEs*).
Productive business : a business that produces goods and or
services, provides added value and increases business revenue
Feasible business : a business that makes a profit so it has the ability
to pay the entire debt and interest within a specified period and uses its
profit for business development
Non-bankable : a business that can not meet the bank's requirements
especially the provision of collateral.

* Source: Ministry of SME & Cooperative, 2011

KUR IN POVERTY ALLEVIATION PROGRAM

There are 3 clusters concept on national poverty alleviation program:

Cluster 1: social assistance
Cluster 2: society empowerment
Cluster 3: productivity improvement
KUR is included within cluster 3: a productivity-based poverty alleviation program
The target is the productive poor group
As a transition in the process to escape from poverty
Ideally, KUR and other programs within cluster 1 and cluster 2 become integrated
system
For example, those who have passed social grant program can become KUR
target
Currently, the integration of poverty reduction programs is still not
implemented, despite it being a long-term target

KUR SCHEME

10

KUR SCHEME
Government (KUR Policy
Committee)

Executive Banks

Credit

MOU

- Government
Capital

Loan
Repayment

Cooperation Agreement
(KUR Guarantee)
MSE
PRODUCTIVE AND FEASIBLE
BUSINESS

- Guarantee fee
&

Guarantee Company

KUR STAKEHOLDERS
Governments:
1. Coord. Min. for Economic Affairs
2. Ministry of Finance
3. Ministry of Agriculture
4. Ministry of Forestry
5. Ministry of Maritime and Fisheries
6. Ministry of Industry
7. Ministry of SME & Cooperative
8. Ministry of Trade
9. Ministry of State-Owned Enterprise
10. Min. of Manpower & Transmigration
Guarantee Company
1. PT. Askrindo
2. Perum Jamkrindo
3. PT. Jamkrida Jatim
4. PT. Jamkrida Bali Mandara

Executive Banks
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.

BRI
Bank Mandiri
BNI
BT N
Bank Bukopin
Bank Syariah Mandiri
Bank DKI
Bank Nagari
Bank Jabar Banten
Bank Jateng
BPD DIY
Bank Jatim
Bank NTB
Bank Kalbar
BPD Kalsel
Bank Kalteng

Supervisors
1. Bank of Indonesia / FSA
2. B P K P

17. Bank Sulut

18. Bank Maluku
19. Bank Papua
20. BNI Syariah
21. Bank Aceh
22. Bank Sumut
23. Bank Riau
24. Bank Jambi
25. Bank Sumsel Babel
26. Bank Bengkulu
27. Bank Lampung
28. Bank BPD Bali
29. Bank NTT
30. Bank Kaltim
31. Bank Sulteng
32. Bank Sultra
33. Bank Sulselbar

KUR AS A CREDIT GUARANTEE PROGRAM

The funding is 100% from the bank.
The loan is guaranteed by the government, so the MSEs with no
collateral can get the access to loans through this program.
In August 2014, KUR realization reached Rp 164,8 trillion (around US
$ 13.75 billion, 1 US$ equals Rp. 12.000) with the government budget
(through government capital & guarantee fee) amounts to Rp. 15.1
trillion
The total of loans disbursed to debtors are ten times greater than the
budget/funds issued by the government which encourage private
sector participation (banks)

TERMS AND CONDITIONS OF KUR

KUR Mikro :
The credit is up to Rp. 20 million (USD 1700)
Maximum interest rate is 22% (effective rate) annually or equivalent with 0,95% flat
each month.
Debtor Information System (SID) checking is not necessary
Additional collateral is not required

KUR Ritel :
The credit is above Rp. 20 million to Rp. 500 million
Maximum interest rate is 13% annually (effective rate) or 0,57% per month (flatting
rate)
SID checking is required
If necessary, additional collateral should be provided
14

TERMS AND CONDITIONS OF KUR .cont

Suppletion extension / restructuring:

KUR for working capital, tenure from 3 years becomes 6 years;

KUR for investment, tenure from 5 years becomes 10 years;
KUR Linkage (executing) maximum Rp 2 billion;
Credit guarantee coverate rate for priority sectors (agriculture,
fisheries, marines, small industry and forestry) and Indonesia
Migrant Worker (TKI) is 80%, while other sectors is 70%;
Guarantee fee (IJP) is 3,25%;
The credit tenure can be 13 years for plantation sector (hard crop
commodities),
15

KUR LINKAGE

KUR financing can be provided to SMEs using linkage

institutions including the Primary Cooperative, Secondary
Cooperative, Rural Banks / Sharia, Non-Bank Financial
Institutions, Business Group, Microfinance Institutions
conventional or sharia (BKD, BMT, BUMDES, LDKPs).
Linkage Channeling : KUR Disbursement through
linkage institutions with repayment obligations on MSE
as the debtor of KUR.
Linkage Executing : KUR Disbursement through linkage
institutions with repayment obligations on the institutions
as the debtor of KUR linkage;

16

ROLE OF GOVERNMENT

THE EVOLUTION OF KUR REGULATION

Terms and
Conditions

October 2007

May 2008

January 2010

September 2010

January 2012

Type of Credit

KUR until Rp.

500 million

KUR Mikro: until

Rp. 5 mil;
KUR Ritel: > Rp.5
mil until Rp. 500
mil

KUR Mikro: until

Rp. 5 mil;
KUR Ritel: >
Rp.5 mil until Rp.
500 mil

KUR Mikro: until

Rp. 20 mil;
KUR Ritel: >
Rp.20 mil until
Rp. 500 mil

KUR Mikro: until

Rp. 20 mil;
KUR Ritel: >
Rp.20 mil until
Rp. 500 mil

Interest rate

16%

KUR Mikro: 24%

KUR Ritel: 16%

KUR Mikro: 22%

KUR Ritel: 14%

KUR Mikro: 22%

KUR Ritel: 14%

KUR Mikro: 22%

KUR Ritel: 13%

Guarantee fee
(IJP)

1,5%

1,5%

1,5%

3,25%

3,25%

Coverage

70%

70%

70%

Mainstream sector
& TKI: 80%;
Other sector: 70%

Mainstream
sector & TKI:
80%;
Other sector:
70%

Plafon Linkage

1 billion

2 billion

2 billion
18

THE DEVELOPMENT OF KUR STAKEHOLDERS

Entities

2007

2010

2011

2012 - 2014

Bank execution

6 banks

19 banks

19 banks

33 banks

Credit Guarantee
Companies

2 companies

2 companies

2 companies

4 companies

Ministries

7 ministries

9 ministries

10 ministries

10 ministries

Regional
Government

3 provinces

33 provinces

33 provinces

Supervision
Agency

2 agencies

2 agencies

2 agencies

3 agencies

19

OBLIGATION OF TECHNICAL MINISTRY

(ARTICLE 2, MOU)

1) Preparing Micro, Small and Medium Enterprises and

Cooperatives who do productive business (can be an
individual, group, partnership and / or cluster) to be
financed by credit / financing;
2) Establishing policies and priorities of the business that will
receive credit guarantee / financing;
3) Providing guidance and assistance during the credit /
financing period;
4) Facilitating coordination between Micro, Small, Medium
Enterprises and Cooperatives with other parties such as
the company's core / off taker who contribute and support
business.
20

SUPPORTS FROM REGIONAL GOVERNMENT TO EXPAND

KUR FINANCING

Presidential Instruction Number 3/ 2010:

Instruction to Governor of Provinces to design
KUR expansion action plans at the local level
especially for fisheries, marines, small industry,
agriculture, and forestry sectors at the latest 2011.
The KUR working team has been established in 33
provinces since 2011 which coordinate execution
banks and technical unit office activities in
promoting KUR

GOVERNMENT BUDGET FOR SUPPORTING KUR

PROGRAM
Guarantee Fee (Rp. Million)

Government Capital
Injection (Rp. Billion)

GUARANTEE COMPANY
Year

PT
Perum
PT Jamkrinda PT Jamkrida
TOTAL
Bali Mandara
Askrindo Jamkrindo
Jatim

2010

106,957

116,207

223,164

2011

150,317

473,848

624,165

2012

225,613

575,245

266

801,124

2013

129,502

238,863

368,365

Kekurangan
2013

578,933

829,759
TOTAL

1,046

14 1,409,752
3,426,570

PT.
PERUM
Year ASKRINDO JAMKRINDO

2007

850

600

2009

250

250

2010

900

900

2011

800

1,200

2012

831

1,169

2013

880

1,120

2014

700

1,300

Total

5,211

6,539

MINISTRIES SUPPORTING ACTIVITIES

Financial education to migrant workers, official of
provinces and local government and debtors in
productive sectors;
Monitoring & Evaluation
Mentoring to the group of debtors and cooperatives;
Seminar/workshop/Focus Group Discussion;
Research/ study in cooperation with international
organization such as World Bank, JICA, and research
agencies.

KUR PERFORMANCE

KUR DISBURSEMENT IN 2007 - AUGUST 2014

(Rp Billion)

Realization

Average Target

PERFORMANCE OF KUR AS OF AUGUST 2014

KUR delivery during January - August 2014 reaches Rp
26.23 trillion with 1.66 million debtors. Average NPL
reaches 4,5% (According to banking regulation, if NPL <
5.0% it is categorized as moderate /tolerable).

From 2007 until August 2014, the total of KUR delivery

amounts to Rp 164.8 trillion with 11.7 million debtors. The
credit average per debtor is Rp 14,1 million.

KUR DISTRIBUTION ACROSS INDONESIA

Regionally, the top provinces providing KUR in the January - August 2014
period are:

Central Java : Rp. 4.78 trillion (18,2%)

East Java : Rp. 4,10 trillion (15,6%)

West Java : Rp. 3,65 trillion (14,0%)

North Sumatera provides Rp. 1,19 trillion (4,54%) & South Sulawesi reaches Rp.
1.18 trillion (4,50%) while Lampung reaches Rp 698.76 billion (2,7%)

KUR DELIVERY BY ECONOMIC SECTOR

JANUARY - AUGUST 2014
Trade, restaurant & hotel
38.6%

Integrated Trade with

upstream sector*
26.8%

Others
7.7%

Busines Services
4.0%

Agriculture and Fisheries*

16.6%

Community services
1.4%
Mining
Construction 0.1% 0.1%

Small industry*
3.4%

*Total Upstream Sector : 46.8%

Transport, warehousing &

communication
1.2%

Electricity, Gas & Water

0.1%

Slide 28

SECTORAL PERFORMANCE

In January August 2014, KUR realization in trade sector

reaches 65.4% (26.8% is integrated in priority/upstream
sector), other sectors 7.7%, agricultural & fisheries sector
16.6%, small industry 3.4% & the rest is 6.9%.

KUR realization in the priority sectors (agriculture, marines

& fisheries, forestry, small industry, & integrated priority
sectors) reaches 46.8%.

THE FINANCIAL ADDITONAL IMPACT OF KUR PROGRAM TOWARD

MICROENTERPRISE WAS REFLECTED ON DEVELOPMENT OF KUR MICRO
DELIVERY WHICH FASTER THAN KUR RETAIL
45,000,000

000 Rp.

40,000,000
35,000,000
30,000,000
KUR MIKRO

25,000,000

KUR RITEL

20,000,000

TOTAL

15,000,000
10,000,000
5,000,000
2009

*) July 2014

2010

2011

2012

2013

2014*

KUR EVALUATION

KUR AS A SAFETY NET 1

14

13.26
12.34

12.27
12

11.89

10.64

11.18

10
Percentage

8.58
8
6

7.91

6.87

Although there are many KUR

recipients from households in
the non-poor, KUR is still good
enough to reach the poor and
near-poor groups.

5.06

4
2
0
1

SUSENAS 2011 data shows

that about a third of
households of KUR recipients
are in the 40 percent bottom
group.

5
6
7
Expenditure Decile

Distribution of KUR Recipients based on Expenditure Decile

Source: Susenas Q1 2011

10

Improvements in targeting and

efforts to reach the poor
consumers can make KUR
serves more as a safety net.

KUR AS A SAFETY NET 2

PNPM +
Govt
Programs

Characteristics
Head of Household's Years of
Schooling (Years)

KUR
4.66

3.40

5.70

3.54

3.80

Expenditure per Capita (IDR)

657,515

517,468

913,233

580,341

631,199

Poor Household (%)

4.81

12.22

2.90

7.40

11.46

Number of Children (Persons)

1.88

2.02

1.82

1.75

1.65

20.80

16.76

23.62

19.79

20.62

603

2,790

2,171

2,825

63,543

House Area (m2)

Observations

Bank

Others

No Loan

Source: Susenas Q1 2011

Susenas 2011 data shows that the KUR recipients come from lower socioeconomic levels households
compared to the commercial credit recipients. It means, KUR can fill the void of access to credit for
poorer groups than the average bank customer.
However, the KUR recipient continues to come from households with higher socioeconomic level than
the recipient of PNPM credit or other

KUR AS A CATALISATOR OF MSE

By comparing the performance of KUR mikro (in which the recipients are mostly
from small and micro enterprises) and KUR Ritel (the majority of medium-sized
enterprises), it appears that between 2008-2012, KUR Mikro has higher loan growth
rate.
A higher growth rate is also followed by a higher amount of enterprises. The value of
loans per worker and per enterprises are growing as well
In other words, KUR provides access to higher productivity for micro and small
enterprises groups compare to groups of medium-sized enterprises, so the gap
between the two can be reduced in the long term
Strengthening the overall KUR can also be an instrument to promote access for
MSMEs to minimize the gap with big enterprises groups
Growth 2008-2012 (%)
Loan value
Enterprises amount
Loan compare to enterprises
Loan compare to workers

KUR Micro
165.91
59.91
23.14
25.54

KUR Retail
104.39
39.24
15.87
10.36

KUR TO PROMOTE SECTORAL GROWTH

KUR has been provided mainly for trade sector. However, in the last two years,
KUR provision is directed to the primary (priority) sectors, especially agricultural
sector
The improvement of KUR policies has a positive outcome on the loan growth and
the amount of KUR recipients in the agricultural sector, but impact unfavorably to
the trade sector.

ECONOMIC
SECTOR
Ceiling

Dec 12

Dec 13

GROWTH (%)

GROWTH (%)

Outstanding

Debtors

Ceiling

Outstanding

Debtor
s

Agriculture

16.34

18.11

14.14

17.24

20.14

15.46

Trade

57.32

54.70

67.40

56.48

57.59

66.07

KUR Penetration Ratio shows that KUR has significant contribution

on increasing commercial bank credit to agriculture sector.
Sector

Loan outstanding (IDR billion) as of June 2014

(1) UMKM
(2) KUR
(2) / (1)
56,730.50

10,289.05

18%

Fishery

4,095.40

219.11

5%

Mining and Quarrying

5,073.80

53.02

1%

68,567.30

1,727.43

3%

1,605.10

34.18

2%

41,383.50

566.67

1%

360,542.20

29,288.51

8%

Provision of accommodation and the provision of eating and drinking

19,995.00

330.54

2%

Transportation, warehousing and communication

26,325.00

948.66

4%

Financial Intermediaries

14,841.70

483.31

3%

Real estate, Business Ownership, and Business Services

32,962.20

2,891.80

9%

323.30

27.99

9%

Education services

2,649.00

28.02

1%

Health services and social activities

4,810.80

101.10

2%

36,989.20

1,072.85

3%

2,514.10

52.07

2%

Agriculture, hunting and forestry

Processing industry
Electricity, Gas & Water
Construction
Wholesale and retail trade

Government Administration, defense and compulsory social security

Social services, social, cultural, entertainment and other individual

Individual services with serve households
International agencies and other International extra intitutions
Others
TOTAL

172.70

2,910.30

1,924.18

66%

682,491.10

50,038.47

7%

KUR PROGRAM GIVE SIGNIFICANT FINANCIAL

ADDITIONAL IMPACT TO CREDIT GUARANTEE COMPANY
PERUM JAMKRINDO

PT ASKRINDO

9,000,000

7,000,000
8,293,381

8,000,000
7,000,000

6,661,076

6,000,000
5,000,000

5,319,957
4,733,161

4,000,000

5,000,000

4,089,240
3,503,966

4,929,174

5,049,630

4,000,000
3,000,000

1,000,000

6,522,225

6,550,138

6,000,000

2,000,000

Rp. million

2,993,024
3,433,620
1,661,518
1,896,047
1,267,182

1,434,013
1,058,208

2,000,000
1,000,000

2,471,9623,011,115
1,668,7102,079,214
1,389,655

2009

2008 2009 2010 2011 2012 2013

Total Aset

3,000,000

Total Equity

2010

Total Aset

2011

2012

Total Equity

2013

CREDIT GUARANTEE COMPANIES DATA SHOW US THAT KUR

IMPACT ON EMPLOYMENT IS MORE ON MANTAINANCE CURRENT
EMPLOYEE IN MICRO AND SMALL ENTERPRISE

Year
2008
2009
2010
2011
2012
2013
August 2014
TOTAL

PT ASKRINDO
MSME Number
1,144,903
703,925
444,540
623,821
799,123
1,401,227
1,085,426
6,202,965

Workers
2,287,251
1,400,737
881,026
1,224,953
1,633,176
2,842,365
2,194,856
12,464,364

PERUM JAMKRINDO
MSME Number
184,009
173,778
685,571
1,119,242
1,148,377
929,873
595,089
4,835,939

Workers
279,223
223,583
639,554
1,553,479
1,590,636
1,426,070
746,915
6,459,460

MIGRATION OF KUR DEBTORS BECOME COMMERCIAL CREDIT DEBTORS

REACH AROUND 10 PERCENT, MOSTLY IN KUR MICRO OF BRI
as of August 2014

KANWIL

Banda Aceh
Bandar Lampung
Bandung
Banjarmasin
Denpasar
DKI 1
DKI 2
DKI 3
Jayapura
Makassar
Malang
Manado
Medan
Padang
Palembang
Pekanbaru
Semarang
Surabaya
Yogyakarta

TOTAL KANWIL

Debitur

456
249
732
682
717
241
580
536
270
920
741
448
645
287
473
348
687
519
735

10,266

Total KUR Ritel Migrasi

Share (%)
Plafond

Sumber :
KUR Ritel: Portal DWH Divisi TSI, diolah.
KUR Mikro : MIR Divisi Bisnis Mikro BRI

4.44%
2.43%
7.13%
6.64%
6.98%
2.35%
5.65%
5.22%
2.63%
8.96%
7.22%
4.36%
6.28%
2.80%
4.61%
3.39%
6.69%
5.06%
7.16%

100%

87,063
41,107
121,769
147,159
131,723
54,876
138,161
95,132
71,753
184,121
138,134
86,478
103,788
49,143
89,657
84,275
121,754
113,241
125,301

1,984,635

Share (%)

4.39%
2.07%
6.14%
7.41%
6.64%
2.77%
6.96%
4.79%
3.62%
9.28%
6.96%
4.36%
5.23%
2.48%
4.52%
4.25%
6.13%
5.71%
6.31%

100%

Debitur

16,865
21,900
112,426
32,073
31,367
5,872
25,109
23,035
6,528
105,109
76,350
38,155
23,320
17,630
20,768
28,719
134,760
94,674
117,796

932,456

Total KUR Mikro Migrasi

Share (%)
Plafond

1.81%
2.35%
12.06%
3.44%
3.36%
0.63%
2.69%
2.47%
0.70%
11.27%
8.19%
4.09%
2.50%
1.89%
2.23%
3.08%
14.45%
10.15%
12.63%

100%

318,696
460,860
1,473,287
791,131
518,629
113,598
277,268
487,931
191,319
1,567,400
1,423,310
707,208
567,709
238,453
445,126
569,957
1,751,356
1,155,259
1,895,592

14,954,089

Share (%)

2.13%
3.08%
9.85%
5.29%
3.47%
0.76%
1.85%
3.26%
1.28%
10.48%
9.52%
4.73%
3.80%
1.59%
2.98%
3.81%
11.71%
7.73%
12.68%

100%

Debitur

17,052
22,277
113,520
32,603
31,889
5,944
25,424
23,338
6,661
105,948
77,316
38,624
23,780
17,858
21,172
29,056
135,787
95,411
119,103

942,763

(Plafond dalam Juta Rp)

Total KUR Migrasi
Share (%)
Plafond
Share (%)

1.81%
2.36%
12.04%
3.46%
3.38%
0.63%
2.70%
2.48%
0.71%
11.24%
8.20%
4.10%
2.52%
1.89%
2.25%
3.08%
14.40%
10.12%
12.63%

100%

325,068
472,900
1,506,228
812,653
541,205
116,661
288,541
498,837
197,995
1,596,269
1,451,550
721,003
587,182
247,259
460,178
583,264
1,780,439
1,173,165
1,935,864

15,296,262

2.13%
3.09%
9.85%
5.31%
3.54%
0.76%
1.89%
3.26%
1.29%
10.44%
9.49%
4.71%
3.84%
1.62%
3.01%
3.81%
11.64%
7.67%
12.66%

100%

THANK YOU

Coordinating Ministry for Economic Affairs

www.ekon.go.id