The program’s goal is to help people who have difficulties in finding loans low interest for their small scale business. The Secretary of Coordinator of Economy Sector of Indonesia said that giving the easy access for the funding of micro, small, middle-up scale business is one of the government concerns. He stated that the government has distributed IDR 8, 9 billion to 69 members of cattle cluster in middle Java as an example of the distribution of the program.
The Regulation for the Loans Low Interest
The government has set the regulation for this matter in Permenko number 11 in 2017, which means the credit program is given for the cluster that is organized together by the people and using partnership for the commodity such as cow.
The Partnership with the Banks
The assigned banks for this loans low interest programs are Bank BRI, Bank Mandiri, Bank BNI, and Bank Sinarmas. Also local banks like Bank Jatim in East Java, Bank Jateng in Central Java, and Bank Jabar in West Java. The government orders these banks to be ready to help the people with the loans. The bank should help the people to prepare all the pre-requisites and all supporting documents that will be needed.
It is expected that the cooperative banks will make the financing problem in the proposal for the loans easy for the breeders.
The Interest Scheme
- In the first time it is launched in 2007-2014, the credit given with quite high interest, 24% for micro business, and 13% for the retails.
- Starting from 2015 the scheme of the interest is down onto 12%
- The, since the first of January 2018, the rate of interest is lowered into the lowest point of 7% only, until now.
The requirements for the small scale business
Commonly there are many kinds of credit program offered by banks or financial institutions. As it is mentioned before, one of them is the credit for the small scale business like cow breeding. The credit given for this kind of farmer or breeder is the program of credit for the micro business. Here are some of its provisions you need to know.
1. The limit credit is IDR 25 million per debtor for two years
2. If it is the cluster breeder, you can have more limit credit, which is up to IDR 50 million by using partnership system for certain commodity
3. The features and benefits you can get from this credit program:
- The process is easy and fast
- The easy required conditions
- The collateral is the commodity that you’re running in your business (in this case, cow)
- The interest rate is only 7% per year
- The time period: 3-5 years
The procedure or mechanism of the loans low interest proposal
Here is the way you propose for a credit for micro business in a bank:
- Get your application for the credit completed with some documents, i.e. business permit, and the financial record
- The Bank will analyze your business based on your application proposed
- If the Bank said that your business is deserved for a loan, that the Bank will approve your credit application. The decision is an absolute authority of the Bank
- The Bank and the Debtor sign an agreement on the credit
- The debtor is obliged to pay the installments to the Bank until the loan paid off in a determined time period
The Government Efforts to Help the Cow Breeder’s business to be more developed
1. To support the growth of small business in cow breeding, the government keeps trying to push the fresh cow milk to get into important staple to consume. By doing this, it is expected that the price of the fresh milk will rise, and it gives immediate impact for the breeding cow business.
Today the price of the fresh milk from the dairy is like mentioned below:
- IDR 4.200 – IDR 5.200 per liter in Central Java in July 2018
- IDR 4.800 –IDR 6.156 per liter in East Java
- IDR 4.200 –IDR 5.650 per liter in West Java
2. The government is still proposing a draft so that the number above could rise immediately, and it is expected to be approved in a very short time to help the dairy breeder develop their business.The government also strives for partnership program by encouraging the cow breeder to make partner in procurement of the cow’s feed through the rent of grassland. It is meant to push the production cost and enhance the quality of the milk so that the breeder can get a good price of the milk he produced
3. The other important movement done by the government is that the government encourage the importer of milk and product form processed milk like cheese and yoghurt to introduce a program of drinking fresh milk to the school-age kids.
4. Revision from Permentan number 26 2017 into Permentan number 33 2018. By doing the revision, the government put the protection for the breeder when they do the business in partnership system. The partnership is done on the basis of giving benefits for sides, trusting each other side, and needing each other. Only, this partnership doesn’t have written agreement between the two sides that is acknowledged by the government. The presence of the government on this partnership is functioned as the mediator if the two sides experience a conflict.
So basically, in addition to loans low interest, the government has also done many things to support the development of the nursery business in its own country.