MICROFINANCE - KUR - Govt considering 100 pct insurance for smallholder`s credits

Jakarta (ANTARA News) - The government is considering providing 100 percent insurance for smallholder credits (KUR) in order to assure issuing banks of their funds, a cabinet minister said.

Minister for Cooperatives and Small Businesses Sjarifuddin Hasan said here on Tuesday that his side was still studying the possibility of providing 100 percent insurance for KUR credits.

At present the government provides 80 percent insurance for KUR credits through the Insurance Agency while the remaining 20 percent was borne by the issuing banks.
Before, the government only bore 70 percent through the insurance institution but now it had been raised to 80 percent. Now it is expected that the government would bear 100 percent.

The minister said that his side was still continuing to study the possibility of raising the insurance to 100 percent.

"We have to pass through the policy committee in the first place and this proposal is expected to eliminate banks` doubts in providing KUR credits," the minister said.

Sjarifuddin said that in order to eliminate banks doubts the insurance for KUR should be raised to 100 percent. This proposal still had to be studied further so that credits would run smoothly.

"We still have to consider many things, one of which the possibility of debtors having no challenge the credits obtain 100 percent," the minister said.(*)