Implementation of People’s Business Credit Loans for Micro-Business Owners

Dewi Sartika (), Trisninawati Trisninawati, Tasya Vinanda, Nadia Sukma and Feny Agustina
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Dewi Sartika: Universitas Bina Darma
Trisninawati Trisninawati: Universitas Bina Darma
Tasya Vinanda: Universitas Bina Darma
Nadia Sukma: Universitas Bina Darma
Feny Agustina: Universitas Bina Darma

A chapter in Proceedings of the 3rd International Conference on Management and Business (ICOMB 2024), 2025, pp 193-199 from Springer

Abstract: Abstract Background: The Indonesian government has initiated the People’s Business Credit (Kredit Usaha Rakyat, KUR) program to support the development of micro, small, and medium enterprises (MSMEs) by enhancing micro-entrepreneurs access to capital. Objective: This study aims to examine the implementation of KUR loans for micro-entrepreneurs at Bank Sumsel Babel (BSB), Kapten A. Rivai Branch, Palembang. Methodology: A qualitative approach was employed, using descriptive analysis of data gathered through interviews with five informants and supported by direct observations. Results: The findings revealed several issues contributing to non-performing loans (NPLs) at BSB Kapten A. Rivai Branch, including declining business performance that adversely affected debtors’ repayment capacity, misallocation of loan funds intended for business capital to other uses, and poor payment ethics. These factors resulted in financial losses for the bank as debtors failed to fulfill their obligations. Furthermore, delayed repayments escalated interest rates, compounding the debt burden. Conclusion: To address these challenges, BSB Kapten A. Rivai Branch should implement regular monitoring mechanisms and enhance customer education on the terms and conditions of credit applications to ensure better loan management.

Keywords: People’s Business Credit; Non-Performing Loans; Bank Sumsel Babel; MSMEs (search for similar items in EconPapers)
Date: 2025
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DOI: 10.2991/978-94-6463-698-7_21

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