Ultra-micro credit program to enable equal welfare distribution: Minister Puspayoga

Cooperatives and Small and Medium Enterprises (UKM) Minister Anak Agung Gede Ngurah Puspayoga said that an ultra-micro credit program would enable equal distribution of welfare among community.

"The ultra-micro credit program will support micro credit program (KUR)," Puspayoga stated here on Monday.

The ultra-micro credit program can reduce poverty rate because society can be independent of its business.

Each beneficiary of the credit program will receive between Rp1 million and Rp10 million.

The government, under President Joko Widodo, is currently focusing on infrastructure development, such as building ports, airports, and toll roads, to facilitate economic access of the people, he remarked.

"Tourism development is intended to increase economic growth," he noted.

In his remarks, Finance Minister Sri Mulyani explained that some 44 million business actors could not access the micro credit program.

The remarks was delivered by Head of Regional Office of Directorate General of Treasury of East Java R Wiwin Istanti.

"Poor people could not have easy access to the banking system. But now they can get the maximum ultra-micro credit program worth Rp10 million," he explained.

The cooperatives that meet the specified requirements can distribute ultra-micro credit program.

Sri Mulyani earlier urged financing institutions to lower interest on ultra-micro credits to 9 percent each year.

"The ministry will monitor and review institutions distributing credits in an attempt to maintain the interest at 9-11 percent each year," Sri Mulyani revealed after the launch of an ultra-micro credits program here on Monday.

To distribute the credits, the government will cooperate with three state-owned micro financing institutions, state-owned pawnshops, Permodalan National Mandani, and Bahana Artha Venture. The three institutions will cooperate with cooperatives to distribute the credits to the people.

As a pilot project, the government has allocated Rp1.5 trillion to be distributed to 19 villages across the country, which is expected to involve 300 thousand micro-businesspeople.

Each beneficiary of the credit program will receive between Rp1 million (US$75) and Rp5 million.

The Finance Ministry's investment center records 61 million micro-businesspeople to have no access to financing facilities as the existing government microcredit program (KUR) can only distribute funds to 17 million people.

Through the program, the government has strengthened its financing institutions in an effort to cut the interest of financing to the community.

"The government has strengthened those who have served the community to lower the interest," the minister remarked.

Source: ANTARA