REPUBLIKA.CO.ID, BANDA ACEH -- The Cooperatives and Small and Medium Enterprises Ministry said the government would soon disburse Rp30 trillion in People's Business Credit (KUR) for small and medium scale enterprises (SMEs).

Deputy Minister for Business Restructuring and Development Braman Setyo said preparations have been 95 percent completed for the disbursement of the KUR.

"The process has been 95 percent (completed). We are awaiting only coordination with banks," Braman Setyo said here on Monday.

He said based on the memorandum of understanding with banks appointed as the credit providers including BRI, Bank Mandiri and BNI, disbursement would begin on Thursday this week.

He said the credit ceiling is set at Rp25 million for micro enterprises with interest rate of 7 percent and from Rp25 million to Rp500 million for retail sector with interest rate of 3 percent a year.

"If agreements have been signed , Rp30 trillion would be disbursed in the remaining 5 months of this year," he said.

He said he is optimistic that the process of disbursement of KUR would be better this year with no more non performing credit such as in the past years.

"Certainly banks would not make the same mistake . We in the policy committee that includes the office of the coordinating minister for economy, Bank Indonesia, the Financial Service Authority (OJK) and related ministry, would continue to make periodical evaluation," he said.

He said the cutback in number of banks as credit providers from seven to only three is also part of an attempt to minimize the potency of non performing loan.

He said the government also is considering appointing some good performing regional development banks (BPDs) to take part in the disbursement of KUR.

BRI will have the lion share of Rp24 trillion in the credit distribution with the remaining Rp6 trillion to be split between Bank Mandiri Rp2.5 trillion, BNI Rp1.5 trillion and BPDs Rp2 trillion.

Six BPDs are in the process of evaluation of the OJK to be considered to take part in the KUR disbursement program.

The regional administrations' banks may not have NPL more than 5 percent and they must already use information technology.

The priority in the credit distribution would got enterprises operating in the agricultural, sea fisheries, small industries and other processing industries.

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