Farmers’ perceptions and issue of Kredit Usaha Rakyat in Indonesia

Abstract

The scheme of People’s Business Credit (KUR) is working capital financing credit or investment program in individual, corporate or business group who are productive and worthy. For the agricultural sector, since 2019 the financing program is only KUR that aims to increase agricultural production through the use of recommended technology and the use of other production facilities properly. The objective of the study is to analyze farmers’ perceptions of the scheme KUR’s business process. The research was conducted in four districts, namely Brebes, Central Lampung, Wajo, and Malang Districts with a survey method of 232 respondents. The results of the quantitative descriptive analysis reveal that the KUR’s distributors use the precautionary principle on the aspects of the guarantee requirements, the amount of credit, the repayment period, and the frequency of the loan. Meanwhile, from the perspective of prospective debtors, the requirements and processes for applying credit vary between KUR’s distributors. KUR debtors have a better perception of the scheme of KUR’s business process, compared to non-debtors. About 74% of KUR’s debtors stated that the KUR requirements were simple, easy procedures, timely processing, no additional collateral required, low interest, sufficient socialization, no additional fees, and a ceiling fund as needed, while non-debtors were only 38.4%. There is a need for more comprehensive socialization, promotion, and advocacy, to minimize the gaps in the implementation of the scheme of the KUR business process.