Analysts Highlight Risks in PNM's Plan to Become UMKM Bank: Potential for Troubled Loans and Fiscal Burden

JAKARTA, KOMPAS.com - The Finance Minister Purbaya Yudhi Sadewa’s plan to turn PT Permodalan Nasional Madani (PNM) into a bank dedicated to micro, small, and medium enterprises (UMKM) is seen as having positive intentions but harbouring several major challenges, particularly in terms of credit risk and long-term fiscal implications.

Investment Analyst at Infovesta Utama, Ekky Topan, views the move as driven by the government’s desire to improve the effectiveness of Kredit Usaha Rakyat (KUR) distribution, which has so far been deemed suboptimal.

“The reason is clear: the government wants future KUR distribution to be more effective. From Purbaya’s statements, there appears to be dissatisfaction with the current credit distribution results, including concerns about credit quality and the effectiveness of the substantial annual subsidies,” Topan told Kompas.com on Tuesday (7/4/2026).

However, Topan reminds that the main challenge lies in the characteristics of UMKM debtors themselves, who have higher risks compared to general commercial credit.

“The issues with UMKM are not just access, but also debtor quality, repayment ability, and risk profiles that are inherently higher. If credit requirements are relaxed for the sake of speed, the risk of default could also increase,” he said.

Topan assesses that without fundamental improvements, this step risks merely shifting old problems to a new institution rather than resolving the root causes of UMKM financing.

In addition to credit risks, Topan highlights equally complex implementation challenges. Transforming PNM into an UMKM bank requires readiness in various aspects, from capital, human resources (HR), operational systems, to strict supervision.

“If governance is not truly strong, the potential for fraud must also be anticipated. This is not just about forming a new institution, but building a system that truly fits the UMKM character,” he stated.

According to him, the market will be sensitive to the possibility of emerging implicit state burdens if credit quality deteriorates in the future.

“The question will clearly be, who bears the risk if troubled loans increase? Will this become a contingent liability for the state?” Topan said.

With these various challenges, Topan believes the main focus should not only be on establishing the UMKM bank, but on overhauling the overall credit distribution mechanism.

“The goal is indeed good, but more importantly, ensuring that the credit distribution system is efficient, disciplined, on target, and remains financially healthy,” he concluded.