People's Business Credit (KUR): Between MSME Empowerment and Legal Deviation Loopholes
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Abstract
The distribution of People's Business Credit (KUR) as a strategic government program to empower Micro, Small, and Medium Enterprises (MSMEs) faces serious challenges in the form of legal deviation practices. This study aims to analyze legal deviations in KUR distribution and identify efforts to enhance supervisory effectiveness in preventing program misuse. The research employs a normative juridical approach with analytical descriptive specifications, examining positive legal provisions governing KUR and the various modes of deviation that occur. The findings reveal that legal deviations in KUR distribution include financial data manipulation, document forgery, fictitious business applications, collusion between business actors and bank officers, and fund misappropriation for purposes beyond business objectives. These practices violate Coordinating Minister for Economic Affairs Regulation Number 1 of 2022 and may be subject to criminal sanctions under Articles 263, 372, and 378 of the Indonesian Criminal Code, as well as corruption charges if they result in state financial losses. Banks as distributing institutions bear responsibility for implementing the prudential banking principle and the know-your-customer principle, while the Financial Services Authority holds authority to impose administrative sanctions on negligent banks. Preventive measures against KUR misuse require regulatory strengthening with clear criteria for productive and feasible businesses, stringent document verification, direct assessment of business existence, internal collusion prevention, fund utilization monitoring, and consistent law enforcement. Through such comprehensive strategies, the KUR program can be distributed with precise targeting and provide optimal contributions to MSME empowerment and national economic development.
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