<![CDATA[People’s Business Credit (Kredit Usaha Rakyat/KUR) is a government financing program designed to improve access to capital for productive Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. Despite its significant contribution to economic development, the implementation of KUR has encountered various legal challenges, particularly the misuse of loan funds by debtors for purposes inconsistent with the agreed credit objectives. Such deviations frequently result in non-performing loans, causing financial losses to banks and reducing the effectiveness of the KUR program. This study aims to examine the implementation of legal sanctions and the repressive legal remedies available to banks in resolving non-performing loans arising from the misuse of KUR by debtors in Indonesia. The research employs a normative legal method using statutory, conceptual, and case approaches. Primary, secondary, and tertiary legal materials were analyzed through a qualitative descriptive approach. The findings indicate that banks primarily impose civil sanctions based on credit agreements, including written warnings, debt collection, credit restructuring where legally justified, acceleration of loan repayment, and collateral execution in accordance with applicable laws and regulations. Furthermore, where evidence of fraud, document forgery, intentional misrepresentation, or other criminal acts is identified, banks may pursue criminal proceedings under the relevant provisions of Indonesian law. The study concludes that effective enforcement of contractual obligations, supported by comprehensive legal protection and prudent banking principles, is essential to safeguarding the sustainability of the KUR program and maintaining the stability of Indonesia’s banking sector]]>
