After BI Rate Hike, Airlangga Clarifies Fate of KUR Interest for MSMEs

Coordinating Minister for Economic Affairs Airlangga Hartarto has confirmed that the increase in the Bank Indonesia (BI) benchmark rate, or BI Rate, will not affect the interest rate on People’s Business Credit (KUR), which remains at 6 percent per annum. This is because the KUR interest rate is set through a government subsidy scheme for MSMEs, meaning it does not directly follow changes in the BI Rate. “The BI Rate increase does not change the KUR provided by the government at 6 percent,” Airlangga said at the Smesco Building in Jakarta on Monday, 29 June 2026. “So, the 6 percent is a subsidised interest rate provided by the government to MSMEs,” he stated. He emphasised that the government continues to provide the KUR interest subsidy to maintain affordable financing access for MSMEs. Airlangga also said the government will increase the KUR distribution ceiling specifically for the housing sector. “The government is even increasing the People’s Business Credit, for example for housing, the figure has been raised to Rp50 trillion. The interest rate remains the same as the KUR subsidy rate,” he said. KUR is a government-subsidised financing programme aimed at expanding capital access for MSMEs and productive sectors. The Ministry of MSMEs recorded that nationally, as of 25 June 2026, KUR distribution realisation had reached Rp143.2 trillion, or 49.3 percent of the 2026 target of Rp290 trillion. This financing has reached approximately 2.2 million MSME debtors, comprising around 1.1 million new debtors and 511,000 graduated debtors. The share of KUR distribution to the production sector nationally has reached 64.1 percent. The government is targeting KUR distribution of Rp290 trillion in 2026, aimed at 1.3 million new debtors and 1.1 million graduated debtors, with at least 65 percent of financing channelled to the production sector.