GOVT ADVISED TO FORMULATE KUR PROGRAM MORE ACCURATELY

Jakarta, Dec 8 (ANTARA) - The government needs to make a more accurate formulation for the distribution of smallholder's business credits (KUR) to prevent them from turning bad, an observer said.
"We should not only think of the channeling aspect but also of how to prevent KUR credits from turning bad or becoming non-performing," economic observer Iman Sugema said here on Monday.
He said 2009 would be a year of economic crisis when layoffs were expected to be rampant. Therefore, the KUR program needed to be accurately formulated in order to help micro, small and middle businesses so that they would be able to absorb workers.
Sugema said the government had pledged Rp2 trillion in additional KUR credits so that the government's total KUR commitment next year would reach Rp20 trillion.
"This figure is still small to absorb workers because it only accounts for 0.5 percent of the national gross domestic product," he said.
He said that the government needed to prepare an accurate formulation for the KUR which would be able to encourage those laid off to create their own business.
"Ideally, the KUR formulation should be able to stimulate the emergence of new entrepreneurs who would serve as a haven for laid-off workers," he added.
Previously, President Susilo Bambang Yudhoyono announced an increase in the KUR provision so that the value of KUR would increase to Rp20 trillion in 2009.
The president has ordered Finance Minister Sri Mulyani to lobby the House of Representatives (DPR) to discuss the government's plan to raise the KUR credits to Rp20 trillion next year.
Up to November 2008, the KUR provision has reached Rp12 trillion with 1,567 million recipients.
Most of the KUR credits were absorbed by East Java province and Central Java (15.06 percent each) and West Java (12.35 percent).
President Yudhoyono had previously projected that about Rp15 trillion in KUR credits would be disbursed this year.***2***