Government Launches Subsidised Microloans for Underprivileged Women at 8% Interest
The government has officially established the legal basis for the implementation of Kredit Perempuan Prasejahtera (KPPS), a credit programme scheme that provides productive financing with an interest rate/margin of 8% flat per annum.
Under this credit scheme, the ceiling prepared for business financing can reach Rp15 million per contract, without additional collateral requirements, for women from underprivileged families who are currently running a business or are about to start one.
This provision is set out in Coordinating Ministry for Economic Affairs Regulation (Permenko) Number 7 of 2026 concerning Guidelines for the Implementation of Kredit Perempuan Prasejahtera, which has been in force since its promulgation on 5 August 2026.
“The issuance of this Permenko is a follow-up to President Prabowo Subianto’s directive that the financing interest burden for the most vulnerable groups in society be reduced significantly, while also implementing the results of the Coordination Meeting of the Financing Policy Committee for MSMEs on 22 June 2026,” said Spokesperson for the Coordinating Ministry for Economic Affairs Haryo Limanseto in a press release on Thursday (13/8/2026).
Until now, ultra-micro business actors, particularly women from underprivileged families, have borne financing interest of around 24% per annum, far above the burden borne by large-scale business actors.
Through KPPS, this burden is reduced to 8% flat per annum. The interest rate reduction is provided through government support in the form of interest subsidies/margin subsidies.
To access the KPPS programme, there are a number of requirements, as this credit programme is intended for women from underprivileged families.
The first requirement is that they are verified based on the national single social and economic data in deciles 1 to 4, have a National Identity Number and family card, and are members of a group of at least five people in the same neighbourhood.
To ensure that no prospective beneficiaries are left behind, the Permenko also opens room for distributors to assess the eligibility of prospective recipients objectively according to the applicable criteria.
In terms of scheme, KPPS is designed to follow the characteristics of ultra-micro businesses. The loan ceiling is set at a maximum of Rp15 million per contract per recipient and can be drawn in full or in stages according to agreement with the distributor.
Recipients can also access KPPS again in multiple contracts without frequency restrictions, so that financing can grow along with the development of their business.
The financing period is a maximum of 24 months, and outside the restructuring scheme, it can be extended to a maximum of 36 months, with a payment scheme agreed with the distributor.
Financing is directed at productive sectors, ranging from agriculture, marine and fisheries, processing industry, construction, tourism, to trade and production services.
What distinguishes KPPS from other programme credits is the empowerment service that is attached and is an inseparable part of the programme.
Distributors are obliged to provide mentoring, provide education on household and business financial management, and provide training to increase business capacity and entrepreneurship.
Recipient groups implement a joint liability mechanism that fosters discipline as well as solidarity among members. KPPS recipients can also become participants in the BPJS Ketenagakerjaan programme independently, so that the businesses they start operate with protection.
Furthermore, distributors are prohibited from requesting additional collateral beyond the business or object being financed.
On the supply side, KPPS channels are opened widely for financial institutions and legally incorporated cooperatives that are healthy, perform well, and have data systems integrated with the Programme Credit Information System (SIKP).
In addition, governance and accountability are also maintained in layers. Supervision is carried out through the KPPS supervision coordination forum coordinated by the Financial and Development Supervisory Agency together with relevant ministries/agencies and financial services sector authorities.
The Financing Policy Committee for MSMEs also evaluates the implementation of the KPPS programme periodically to ensure the quality of distribution.