Issa Sengendo

Impact of The People’s Business Credit Program on the Jakarta Composite Index

Started Aug. 1, 2023

Abstract or project description

Issa and I are examining how credit constraints impact the Indonesia Composite (IDX). Specifically, we are still looking for a variable classified under credit constraints. We will likely choose some form of debt. After collecting our data, we run a regression to determine whether our hypothesis is correct.

Introduction: At the heart of this study is the fundamental question: how do Indonesian People’s Business Credit Loans impact the movement of the Jakarta Composite Index? As defined by the OECD, the Peoples Business Credit Loan Program, or Kredit Usaha Raykat (KUR) in Indonesian, it’s a microcredit program that combines a loan guarantee with an interest rate subsidy that allows banks to lend to small and medium enterprises (SME) at a capped interest rate. The OECD shows that the KUR Programme has proven successful in increasing the credit flow to SMEs.