Indonesian Banks Face Difficulties Disbursing Microcredit

Major Indonesian banks are facing constraints in disbursing government-sponsored microloans (KUR) to small businesses. Many credit applicants’ businesses failed to meet criteria set by banks to make sure they could pay back the loans, Bank Mandiri business banking senior vice president Tatang Tabroni said.

According to the Cooperatives and Small and Medium Enterprises Ministry, Bank Mandiri had disbursed Rp 252.7 billion (US$28 million) under microcredit loans (KUR) to 732 debtors in the first half of this year. However, the government had asked Mandiri to disburse at least Rp 1.84 trillion (US$204 million) worth of KUR by the end of 2010.

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