"Financing of Small and Medium Enterprises: People???s Credit Scheme (KUR) Challenges as Future Prospects of SMEs in Indonesia"

“Financing of Small and Medium Enterprises: People???s Credit Scheme (KUR) Challenges as Future Prospects of SMEs in Indonesia”

Author		: YUHANA ASTUTI
Published on	: Global Trend in Academic  Research (Pan Pasific Hotel di Bali)

Abstract

“Recently, many Small Medium Enterprises (SMEs) in Indonesia are still having problems in getting funds despite various funding programs have been carried out by Indonesian government to aid SMEs. The aim of this study is to understand how People???s Credit Scheme (KUR) as one of the government funding programs for SMEs in Sentra Kaos (T-shirt Cluster) in Suci Bandung and Sentra Tahu Tempe (Tofu Tempeh Cluster) in Cibuntu Bandung, which most of the SMEs in these locations are feasible but unbankable. Government funds can be channeled directly by banks to SMEs, or indirectly through agencies designated by the government, such as credit unions. Descriptive method used in this research shows that (1) the Absorption of KUR funds in the Sentra Kaos in Suci Bandung is still low, because of the lack of proper information (financial access) and SME???s difficulty in fulfillment on 5C assessments (Capital, Character, Collateral, Condition, Capacity) made by the bank as an official institution on KUR; (2) Granting loans to KOPTI’s member (Tofu Tempeh Producer Cooperative) as an institution in the KUR Sentra Tahu Tempe in Cibuntu Bandung, tend to be easier because KOPTI only assessing collateral in lending to its members, which at the end, leads to unpaid credit.

Key Words: funding, KUR, SMEs, Sentra industry, Bandung”