REPUBLIKA.CO.ID, JAKARTA -- President Joko Widodo (Jokowi) has asked Cooperatives and Small and Medium-scale Enterprises Ministry to encourage the distribution of microloan credit (KUR) through cooperatives to small and medium-scale businesses, a minister said.

"Our focus is on how to develop and encourage our small and medium businesses so that we can increase exports," the Minister of Cooperatives and Small and Medium-scale Enterprises (SME), AAGN Puspayoga, said at the State Palace here on Friday.

Puspayoga said his ministry has signed a work agreement with the Financial Service Authority (OJK) in Jambi on the capacity development and financial access of small and medium-scale businesses.

The agreement included cooperation on data and information exchange services and education for human resources. Puspayoga said to support the distribution of KUR funds, cooperatives need adequate amount of turnover. Cooperatives also need a computerization system and effective information technology to manage the KUR funds.

Minister Puspayoga said President Jokowi also evaluated the ministry with a view to enhance the quality and improve the development of cooperatives in an effort to build small and medium-sized businesses.

Earlier, when observing the 69th Cooperatives Day in Jambi, Jokowi had said cooperatives are facing competition because all countries are moving fast in developing online systems with different applications, including online shops.

Currently, there are 212,000 cooperatives of which 150,000 units are active. Another 62,000 are not active.

Jokowi also explained the need to popularize cooperatives and small and medium-sized businesses so that they could be developed into large scale enterprises.

President Jokowi, during a visit to Jambi on Friday, pledged to cut microloan (KUR) interest rate to 7 percent next year.

"The KUR interest rate had once reached 21-22 percent and currently stands at 9 percent. We will make an effort to lower the KUR interest rate to 7 percent next year," the president said while addressing a gathering at the commemoration of the 69th National Cooperatives Day in Jambi province on Thursday.

On the occasion, the president invited Yeni Triana, who has just received Rp200 million in KUR from state lender Bank Mandiri with an annual interest rate of 9 percent to develop banana crispy chips industry.

The president assured Yeni that the KUR interest rate will be lowered to 7 percent next year.

To help ease funding for micro and small businesses, the government has cut KUR interest rates from 22 percent to 12 percent and further to 9 percent to boost micro and small businesses.

The amount of KUR micro loans extended from January 4 to July 15 this year reached Rp55.69 trillion, with the number of debtors exceeding 2.5 million.

The government has set itself the target of extending KUR to the tune of Rp100 trillion by the end of this year, with the number of debtors expected to increase.

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