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MSMEs and Cooperatives that Rise Up Class

Micro, small and medium scale business actors and cooperatives occupy the largest part of all economic activities of the Indonesian people starting from farmers, fishermen, breeders, miners, craftsmen, traders and providers of various services. Until now, Micro, Small and Medium Enterprises (MSMEs) are still one of the leading sectors that can sustain the Indonesian economy. This is evident from the contribution of MSMEs to Gross Domestic Product (GDP) and considerable labor and export absorption.

In addition to the large contribution to the Indonesian economy, MSMEs are also one of the solutions to reduce inequality and income inequality among the Indonesian people, because this sector has high economic resilience. One of the government's priority programs in increasing access to MSME financing to financial institutions with a guarantee pattern is the People's Business Credit (KUR).

The direction of policy in the field of MSMEs and cooperatives in the 2015-2019 period is to increase the competitiveness of MSMEs and cooperatives so that they are able to grow into a sustainable business on a larger scale ("up the class") in order to support the independence of the national economy. The development strategy that will be implemented is through improving the quality of human resources, increasing access to finance and expanding financing schemes, increasing value-added products and marketing reach, strengthening business institutions, and increasing business facilities, certainty and protection.

Taking into account the policy of increasing the competitiveness of MSMEs, the President has determined Presidential Decree No. 14 of 2015 concerning the Financing Policy Committee for Micro, Small and Medium Enterprises as last amended by Presidential Decree Number 19 of 2015. The Financing Policy Committee for MSMEs is chaired by the Coordinating Minister The Economic Sector and consists of ministers / heads of institutions related to the task of formulating and stipulating financing policies for MSMEs including priority setting of business sectors, monitoring and evaluating the implementation of financing policies for MSMEs, and taking steps to resolve obstacles and problems in the implementation of financing policies for MSMEs.

At the end of 2017, the Coordinating Minister for Economic Affairs set a Regulation of the Coordinating Minister for Economic Affairs Number 11 of 2017 concerning Guidelines for Implementation of People's Business Loans which became effective from 1 January 2018. In the regulation, there were 12 new provisions related to interest rate reduction, business groups as KUR recipients, Special KUR scheme, minimum arrangement of KUR distribution portion to the production sector, multi-sector KUR scheme, yarnen payment mechanism, change of KUR Retail term to KUR Kecil, KUR Micro ceiling amount for production sector, KUR distribution together with other allowable credit, KUR fee structure Placement of TKI, KUR for border communities, and KUR for KUBE optimization.

With the determination of the maximum KUR ceiling in 2018 amounting to Rp 120 trillion, it is expected to provide ease of lending to MSMEs, especially in the agriculture, marine and fisheries sectors, processing industries, construction and production service sectors, and placement of Indonesian Workers (TKI) abroad .

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