Source: The Jakarta Post.
Original article available online.
Jakarta, August 18 – The Indonesian Chamber of Commerce and Industry (Kadin) says banks distributing microcredit loans (KUR) have hinted they may lower their interest rates by between 12 and 14 percent.
“The banks distributing KUR are likely to lower their KUR rates by between 12 percent and 14 percent. [Although 10 percent would be more ideal], we know banks need profit margins,” Kadin deputy chairman on micro, small and medium enterprises, Sandiaga S. Uno, told The Jakarta Post on Tuesday.
With interest rates high, the distribution of microcredit loans has been slow. The KUR scheme was initiated under a government program to provide working capital for micro, small and medium enterprises. So far, only IDR 1.9 trillion (USD 190 million) from a total 2010 budget allocation of IDR 20 trillion (USD 2.0 billion) has been made available.
The government distributed around IDR 12.5 trillion (USD 1.2 billion) of the IDR 14 trillion (USD 1.4 billion) allocated in the 2008 state budget for KUR.
Lower interest rates for KUR are necessary to help boost micro, small and medium enterprises, particularly as the Bank Indonesia key rate was cut by 300 basis points to 6.5 percent since late last year.
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