JAKARTA, Jan. 13 (Xinhua) -- Indonesian President Joko Widodo on Friday urged national banks to provide more loans to galvanize productivity in small- and medium-sized enterprises (SMEs) and fishing sector.
"I urge banks and other financial institutions to allocate more productive, not consumptive, loans for the SMEs and fishing sector. This task should ultimately be carried out by regional administration-run banks (BPDs)," the president said in his opening remarks at an annual meeting of national financial industry operators.
The president said governors should also play an active role in increasing productive loan allocations for the two sectors which massively employ people at grass-root level.
"Governors can provide interest rate subsidy which can be retrieved from provincial budget to help boost the livelihood of people working in those sectors," he pointed out.
The Indonesian government provides particular loans for the two sectors through the People's Business Loans (KUR) program that has lower interest rates than commercial loans.
Such a loan was distributed by state-run banks, BPDs and designated private banks.
Some 100 trillion rupiah (about 7.4 billion U.S. dollars) of KUR was allocated last year by the government. That figure was three times higher than a year earlier that stood at around 30 trillion rupiah.
President Widodo said the government will further cut down the KUR interest rates to 7 percent this year from the current 9 percent so as to encourage the SME and fishermen to expand their businesses.
Indonesia has more than 57.9 million SME businesses that employ 97.30 percent of workforce, according to data released by Indonesia's Cooperative and SMEs Ministry.
