The KUR interest rate will be gradually increased to 3 percent in 2027 before returning to the normal rate of 6 percent in 2028.
“For the first year in 2026, we are setting the interest rate at zero. It will increase to 3 percent in 2027 and return to 6 percent in 2028,” Coordinating Minister for Economic Affairs Airlangga Hartarto said in Jakarta on Friday.
In addition to the interest rate adjustment, he said the government is also considering special policies tailored to disaster-affected areas in the three provinces on Sumatra.
Earlier, Hartarto reported the impact of the disasters on KUR distribution to President Prabowo Subianto and proposed a relaxation policy for affected borrowers.
During a plenary cabinet meeting at the State Palace in Jakarta on Monday (December 15), Hartarto said total KUR disbursement across the three affected provinces reached Rp43.95 trillion, or about US$2.6 billion, involving 1,018,282 borrowers.
Of that amount, KUR loans directly affected by the disasters totaled Rp8.9 trillion, involving 158,848 borrowers.
Hartarto has proposed waiving both principal and interest payments for affected KUR borrowers.
Under the proposed scheme, lenders will continue to receive principal and interest payments without filing insurance claims, as the government will fully cover the interest or margin subsidies for regular KUR loans.
Severe floods and landslides hit the three provinces in late November 2025 following high-intensity rainfall.
According to records from the National Disaster Mitigation Agency (BNPB) as of Friday (January 9), the disasters claimed 1,180 lives and displaced around 238,000 people.
Related news: Govt prepares special scheme for KUR debtors affected by floods
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Translator: Bayu Saputra, Raka Adji
Editor: Primayanti
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