Government pushes for MSME credit allocation to rise to Rp2,000 trillion

Jakarta (ANTARA) - The government is encouraging an increase in bank credit allocation for the micro, small, and medium enterprise (MSME) sector from around Rp1,500 trillion to Rp2,000 trillion by 2027 in order to broaden financing access for business actors.

“What is certainly pleasing for MSMEs is that the bank credit allocation of Rp1,500 trillion will later be requested to be raised to Rp2,000 trillion by the Coordinating Ministry for Economic Affairs,” said Maman at the Karya Kreatif Indonesia event in Jakarta on Friday.

Maman explained that total bank credit disbursed to the business sector currently reaches around Rp9,000 trillion. Of that amount, around Rp1,500 trillion is allocated to the MSME sector.

Of the current roughly Rp1,500 trillion in MSME credit, around Rp300 trillion is People’s Business Credit (KUR) and around Rp1,200 trillion is non-KUR credit.

Maman said the government will still review the financing composition if total MSME credit is raised to Rp2,000 trillion in 2027. He stated that the government is open to the possibility of also increasing the KUR portion.

“The aim is for bank credit access, in the context of lending ceilings for the MSME sector, to become even larger,” he said.

However, he cautioned that increased financing must be accompanied by good management and planning to prevent a rise in non-performing loans (NPL).

Therefore, Maman assessed that the needs of MSMEs are not only related to financing. Business actors also need support to ensure that the products they produce have market access.

He said the government and relevant stakeholders need to open financing access while simultaneously strengthening market access for MSMEs so that additional credit can be used productively.

Maman said strengthening market access is an important part of enabling MSMEs to develop their businesses and meet the financing obligations obtained from banks.