Ultra Micro Loan Interest Rate Cut to 8% Awaits Finance Minister Regulation

Coordinating Minister for Economic Affairs Airlangga Hartarto has spoken out regarding the policy to lower ultra micro loan interest rates to 8% from the current range of 18-25%. He stated that the policy is now only awaiting a Finance Minister Regulation (PMK). He expressed hope that the ultra micro loan interest rate cut policy could be implemented soon. “Realisation is imminent. We are just waiting for the PMK. Not this year. We hope it can be executed in the coming months,” Airlangga said after the UMKM Ease and Protection Festival at the Smesco Building in South Jakarta. Airlangga explained that the policy will apply to ultra micro business actors under the guidance of the Program for Fostering a Prosperous Family Economy (PNM Mekaar) with a credit ceiling below Rp 15 million. Meanwhile, credit ceilings above Rp 15 million fall under the People’s Business Credit (KUR) programme. “The requirement is a ceiling of Rp 15 million. The one absolute condition is that it is only for women. So those currently receiving high interest rates will, in a certain period ahead, see a reduction to the PNM interest rate,” Airlangga said. To realise the interest rate cut policy, the government is disbursing a budget of Rp 18-25 trillion. “For PNM now, it is at a level between Rp 18 trillion and Rp 25 trillion, depending on PNM’s cost of fund,” Airlangga stressed.