House Commission VII urges MSMEs to report banks requiring collateral for KUR

House of Representatives Commission VII has asked micro, small, and medium enterprises (MSMEs) to report any distributing bank that requires additional collateral for People’s Business Credit (KUR) loans of up to Rp100 million.

Commission VII chairman Saleh Partaonan Daulay, speaking at Bogor City Hall, West Java, on Friday, stressed that KUR loans of Rp100 million or less do not require additional collateral.

“I need to emphasise and make it widely known that People’s Business Credit of Rp100 million or less does not need to be accompanied by collateral,” Saleh said.

He made the remarks during a Commission VII working visit on financing and capital access for MSMEs and the creative economy in Bogor City.

According to Saleh, if any KUR distributing bank still demands additional collateral from MSMEs, the public can submit a report to the Ministry of MSMEs or to Commission VII.

“If, for example, a bank such as Bank Mandiri, BRI, or BNI imposes such a requirement, it can be reported to the Ministry of MSMEs or to the relevant parties, including Commission VII,” he said.

Saleh asked that complaints be submitted in writing and accompanied by factual evidence so they can be traced and followed up.

“If anyone does that, report it. If necessary, in writing and with factual evidence. With that evidence and those facts, we can trace it, so this can really be stopped,” he said.

According to Saleh, additional collateral requirements can actually become an obstacle for small business owners who need extra capital because they generally have limited assets.

Yet, Saleh said, many MSMEs have business ideas and concepts with potential for development even though they do not own a house, vehicle, or other assets to use as collateral.

“They are borrowing capital precisely because their capital is limited. What they have is an idea, a concept for starting a business. That is what we must support,” he said.

Saleh believes that easier access to financing must be accompanied by mentoring so that the capital received can be managed well, allowing businesses to grow and generate profits.

The working visit was part of the activities of the Working Committee on Financing and Capital Access for MSMEs and the Creative Economy of Commission VII to evaluate the distribution of financing to business actors.

In the evaluation in Bogor City, Commission VII also found a number of problems related to capital access, ranging from business actors still relying on loan sharks for small-scale loans, a lack of financing outreach, to insufficient training in preparing business proposals.

Saleh said that for capital needs below Rp10 million, some business actors still choose loan sharks because the loan process is considered easier.

Meanwhile, Bogor Deputy Mayor Jenal Mutaqin said the Bogor City Government will follow up on the results of the meeting by mapping MSMEs that have difficulty obtaining KUR.

The Bogor City Government has instructed the Cooperatives and MSMEs Agency to validate MSME data as a whole to identify the obstacles each business actor faces in accessing financing.

“So that from the results of this working visit, there is an evaluation of future programmes, and access to KUR for MSMEs can hopefully be more optimal and reachable for our small businesses,” Jenal said.