The Effectiveness Of People's Business Credit Program In The Development Of Micro, Small And Medium Enterprises Of The Setia Budi Branch In Medan Sunggal District

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The Effectiveness of People's Business Credit Program in the Development of Micro, Small and Medium Enterprises of the Setia Budi Branch in Medan Sunggal District

Introduction

Micro, Small and Medium Enterprises (MSMEs) play a vital role in the Indonesian economy, as they have the potential to absorb labor and contribute significantly to the country's economic growth. However, the development of MSMEs still faces numerous challenges, with one of the main obstacles being the problem of capital. To address this issue, the government launched the People's Business Credit Program (KUR), which aims to provide financing access to MSMEs through financial institutions. The KUR program is expected to strengthen MSME business capital, accelerate the development of the real sector, and empower MSMEs. This study aims to assess the effectiveness of the KUR program in the development of MSMEs in the Setia Budi Pegadaian branch in Medan Sunggal District.

Background

The KUR program was launched by the government as a solution to provide financing access to MSMEs. The program is based on the Regulation of the Minister of Economics of the Republic of Indonesia Number 1 of 2022 concerning Guidelines for the Implementation of KUR. The regulation states that the KUR program aims to provide financing access to MSMEs, strengthen MSME business capital, accelerate the development of the real sector, and empower MSMEs. The program is expected to achieve these goals by providing financing access to MSMEs through financial institutions.

Methodology

This study uses a descriptive qualitative method to assess the effectiveness of the KUR program in the development of MSMEs in the Setia Budi Pegadaian branch in Medan Sunggal District. The informants involved in this study consisted of non-palans, account officers, BPO KUR, billing officers, and MSMEs in the Setia Budi Pegadaian branch. Data collection techniques used in this study include interviews, observation, and literature studies. For data analysis, data reduction techniques, data presentation, and drawing conclusions were used.

Effectiveness Indicators

The effectiveness indicator used in this study refers to Sutrisno (2007), which includes program understanding, target, timeliness, achievement of program goals, and real changes. Program understanding refers to the level of understanding of the KUR program among MSME actors. Target refers to the accuracy of the program targets, which includes the distribution of KUR that is absorbed by the productive business sector. Timeliness refers to the speed at which the KUR program is implemented. Achievement of program goals refers to the level of achievement of the program goals, which includes the strengthening of MSME business capital, acceleration of the development of the real sector, and empowerment of MSMEs. Real changes refer to the level of change in the lives of MSME actors after receiving KUR.

Results

The results of this study showed that the effectiveness of the KUR program in the development of MSMEs in the Setia Budi Pegadaian branch had not yet achieved the desired expectations. First, in terms of program understanding, the socialization of KUR is not optimal. MSME actors not only need to understand the KUR procedure, but also must know the benefits and objectives of the program. Second, the accuracy of the program targets shows that there is still a distribution of KUR that is not absorbed by the productive business sector. Third, although the purpose of the KUR program is to help overcome the problem of MSME capital, the results are only able to solve capital problems without being followed by business developments and increasing income. This can be seen from the lack of concrete changes in the lives of MSME actors after getting KUR.

Discussion

From this study, only one MSME actor showed business development, marked by an increase in income and planned business expansion in the near future. Meanwhile, other MSMEs did not experience significant development; some only survive without business growth. In addition, there is a problem of bad credit because MSMEs do not run their business after receiving KUR, caused by errors in planning a business development strategy. Thus, a more in-depth evaluation is needed regarding the implementation of the KUR program in order to have a greater positive impact on the development of MSMEs.

Conclusion

In conclusion, this study found that the effectiveness of the KUR program in the development of MSMEs in the Setia Budi Pegadaian branch had not yet achieved the desired expectations. The socialization of KUR is not optimal, the accuracy of the program targets is still a problem, and the results of the program are only able to solve capital problems without being followed by business developments and increasing income. Therefore, a more effective socialization, training in business planning, and post-loading guidance need to be considered so that this program can achieve the expected goals. Collaboration efforts between the government, financial institutions, and SMEs are very important in creating ecosystems that support the growth and development of micro, small and medium enterprises in Indonesia.

Recommendations

Based on the findings of this study, the following recommendations are made:

  1. More effective socialization: The socialization of KUR needs to be more effective, so that MSME actors can understand the benefits and objectives of the program.
  2. Training in business planning: Training in business planning needs to be provided to MSME actors, so that they can plan their business development strategy effectively.
  3. Post-loading guidance: Post-loading guidance needs to be provided to MSME actors, so that they can run their business effectively after receiving KUR.
  4. Collaboration efforts: Collaboration efforts between the government, financial institutions, and SMEs are very important in creating ecosystems that support the growth and development of micro, small and medium enterprises in Indonesia.

Limitations

This study has several limitations, including:

  1. Limited sample size: The sample size of this study is limited, which may affect the generalizability of the findings.
  2. Limited data collection: The data collection techniques used in this study are limited, which may affect the accuracy of the findings.
  3. Limited analysis: The analysis of the data is limited, which may affect the interpretation of the findings.

Future Research Directions

Future research directions include:

  1. More in-depth evaluation: A more in-depth evaluation of the implementation of the KUR program is needed to have a greater positive impact on the development of MSMEs.
  2. Longitudinal study: A longitudinal study is needed to assess the long-term impact of the KUR program on the development of MSMEs.
  3. Comparative study: A comparative study is needed to compare the effectiveness of the KUR program with other financing programs for MSMEs.
    Q&A: The Effectiveness of People's Business Credit Program in the Development of Micro, Small and Medium Enterprises

Q: What is the People's Business Credit Program (KUR)?

A: The People's Business Credit Program (KUR) is a financing program launched by the government to provide access to financing for Micro, Small and Medium Enterprises (MSMEs) through financial institutions.

Q: What are the goals of the KUR program?

A: The goals of the KUR program are to strengthen MSME business capital, accelerate the development of the real sector, and empower MSMEs.

Q: How does the KUR program achieve its goals?

A: The KUR program achieves its goals by providing financing access to MSMEs through financial institutions, which enables them to strengthen their business capital, accelerate their business growth, and become more competitive.

Q: What are the challenges faced by MSMEs in accessing financing?

A: MSMEs face several challenges in accessing financing, including limited access to credit, high interest rates, and strict loan requirements.

Q: How does the KUR program address these challenges?

A: The KUR program addresses these challenges by providing financing access to MSMEs through financial institutions, which enables them to access credit at a lower interest rate and with more flexible loan requirements.

Q: What are the benefits of the KUR program for MSMEs?

A: The benefits of the KUR program for MSMEs include access to financing, which enables them to strengthen their business capital, accelerate their business growth, and become more competitive.

Q: What are the limitations of the KUR program?

A: The limitations of the KUR program include limited socialization of the program, inaccurate program targets, and limited post-loading guidance.

Q: What are the recommendations for improving the effectiveness of the KUR program?

A: The recommendations for improving the effectiveness of the KUR program include more effective socialization, training in business planning, and post-loading guidance.

Q: What is the role of the government in the KUR program?

A: The government plays a crucial role in the KUR program by providing financing access to MSMEs through financial institutions and by implementing policies and regulations that support the growth and development of MSMEs.

Q: What is the role of financial institutions in the KUR program?

A: Financial institutions play a crucial role in the KUR program by providing financing access to MSMEs and by implementing policies and procedures that support the growth and development of MSMEs.

Q: What is the role of MSMEs in the KUR program?

A: MSMEs play a crucial role in the KUR program by accessing financing through financial institutions and by implementing business development strategies that support their growth and development.

Q: What are the future research directions for the KUR program?

A: The future research directions for the KUR program include more in-depth evaluation of the implementation of the program, longitudinal studies to assess the long-term impact of the program, and comparative studies to compare the effectiveness of the program with other financing programs for MSMEs.

Q: What are the implications of the findings of this study for policymakers and practitioners?

A: The findings of this study have several implications for policymakers and practitioners, including the need for more effective socialization of the KUR program, training in business planning, and post-loading guidance.