People’s Business Credit helps Micro Small Medium Enterprises of West Papua

Photo: Socialization of the People's Business Credit program in Papua (Directorate General of Treasury Ministry of Finance)
Photo: Socialization of the People's Business Credit program in Papua (Directorate General of Treasury Ministry of Finance)

Citizen’s Enterprise Credit Program (KUR) is a government attempt to support Micro Small Medium Enterprises (UMKM). In West Papua Province alone, 13,912 debtors have utilized this program in 2016. As a result, profits gained by businessmen are getting bigger and the business level getting wider.

Micro Small Medium Entreprises have a crucial role in the Indonesian economy. According to research by Berry et.al (2001) and Funabashi (2013), MSMEs have a high resistance to the economic crisis compared with large companies. This is why Indonesia is still able to survive when the global economy went down in 2008-2009.

According to Hadiwijoyo, MSMEs can survive the economic crisis because of three things: First, MSMEs produce consumer goods and services that are essentials for the community; second, MSMEs take advantage of factors of production (raw materials, human resources) inside the country; third, material used by UMKM comes from personal funds. In addition, based on data from the State Minister for Cooperatives Small and Medium Enterprises in 2013 the number of MSMEs reached 99.9% of the existing business units and is able to absorb 110.2 million workers and contribute to GDP of Rp4.202, 9 trillion rupiahs. The large role of MSMEs encourage the government to continue to support MSMEs, namely by issuing the People’s Business Credit program (KUR). KUR is a credit scheme of venture capital or investment from a banking institution, where interest rates on loans are subsidized by the government. The amount of credit granted as business capital can reach five hundred million rupiah.

In West Papua Province KUR has been distributed to 13,912 debtors by 2016. With details of 1,629 debtors in Sorong District; 4,116 debtors in Manokwari; 952 debtors in Fak-Fak; 470 debtors in Sorong Selatan; 492 debtors in Raja Ampat; 956 debtors in Bintuni Bay; 260 debtors in Wondama Bay; 315 debtors in Kaimana; 158 debtors in Tambrauw; 81 debtors in Maybrat; and 4,483 debtors in Sorong City. The realization of KUR in 2016 also increased compared to the previous year. Rp1, 338 trillion reached in Papua or an increase of Rp34 billion or 221.2% compared to the realization of 2015. In West Papua, the increase is also significant Rp388 billion or an increase of Rp388 billion. (Info Nawacita)

Based on the evaluation and monitoring results of the Directorate General of Treasury of the West Papua Regional Office, Ministry of Finance conducted in 2017, the KUR program increased business profits and business level expansion; the community also felt the satisfaction of credit application, because the process of submission until the disbursement of funds is easy and fast and no deductions on loans received.

Keywords: Papua Province, West Papua Province, West Papua, economy, Indonesia, People’s Business Credit, evaluation, monitoring, budget realization, good governance, profit impovement

By: Zura (Researcher, MaCDIS)

Editor: Nabilah Audah