TEMPO.CO, Jakarta-The provincial government of East Java has prepared a budget of Rp1.7 trillion for provision of people's business credit (KUR) for the Micro, Small and Medium Enterprises (SMEs) sector. The budget, taken from the Regional State Budget and Expenditure (APBD), is expected to boost the number of SMEs in the province.

"The principle is in terms of who bears the risks. So far, the entity that is ready to bear the risks of the funds is East Java Bank (Bank Jatim)," East Java Governor Soekarwo said on the sidelines of the Banks & SMEs Expo 2016 at the Grand City Surabaya, Thursday, February 11.

According Soekarwo, the provincial government must be willing to intervene to boost the economy by applying policies that support the provision of low interest rate cost for KUR.

To that end, Soekarwo said he is proposing to the government that KURs could be disbursed by other banks—not just by Bank Rakyat Indonesia (BRI).

"If possible, KUR should be disbursed by other BPRs so that micro finance institutions (MFIs) in small areas can sustain their businesses as well," he said.

According to Soekarwo, with a wider KUR reach, SMEs in outer areas can absorb the KUR loans. This would reduce the rate urbanization and unemployment.

The Banks & SMEs Expo 2016 is being held in Surabaya from February 11 to 14. "Producers and buyers can meet here face to face, so the possibility of transactions will increase," he said.

The expo also serves as a meeting point for MSMEs and banks. Around 110 SME booths will display East Java's creative economy-based products.

The expo's committee chairman R. Soeroso hopes the event could rake in Rp3 billion in transactions from some 25,000 potential buyers.

"The exhibition aims to increase the competitiveness of the creative economy sector by micro, small, and medium enterprises in East Java," he said.

ARTIKA RACHMI FARMITA