MSME Credit Needs to Increase by Rp540 Trillion to Hit 2029 Target
The Ministry of Micro, Small, and Medium Enterprises (MSMEs) has stated that MSME credit needs to be increased by around Rp540 trillion to reach the target ratio of 25 percent of total bank lending by 2029. “There is an acceleration that needs to be carried out so that the addition of MSME credit can exceed Rp540 trillion to balance or achieve the Strategic Plan (Renstra) target of 25 percent by 2029,” said Secretary of the Ministry of MSMEs Loto Srinaita Ginting during a hearing with Commission VII of the Indonesian House of Representatives (DPR RI) in Jakarta on Monday.
Based on the Ministry of MSMEs’ presentation referencing 2025 data from Bank Indonesia’s Economic and Financial Statistics System (SSKI), total bank lending reached Rp8,149 trillion. Of this amount, credit disbursed to MSMEs was recorded at Rp1,497 trillion, or only about 18.3 percent of total bank lending. With this composition, the Ministry of MSMEs assesses that the value of MSME credit needs to increase to Rp2,037 trillion so that the financing ratio for the MSME sector reaches the 25 percent target as stipulated in the 2025-2029 National Medium-Term Development Plan (RPJMN).
The Ministry of MSMEs is targeting a gradual increase in the MSME credit ratio, namely to 21.6 percent in 2025, 22.2 percent in 2026, 22.9 percent in 2027, 23.6 percent in 2028, and finally reaching 25 percent in 2029. To achieve this target, the government is dividing financing schemes according to the characteristics of MSME players. MSMEs that have met banking requirements (bankable) are directed to access commercial credit. Meanwhile, MSMEs that are not yet bankable but are deemed to have a feasible business are encouraged to utilise Kredit Usaha Rakyat (KUR), and MSMEs that are neither bankable nor feasible are facilitated through the financing scheme of PT Permodalan Nasional Madani (PNM).
In addition to strengthening financing access through KUR and PNM, the Ministry of MSMEs is also preparing several supporting programmes, including Kredit Alumni Usaha Rakyat (AKUR) for business actors who have graduated from the KUR programme, the Accelerating Capital Resources for Medium Enterprises (ACCESS) programme for medium-sized enterprises, and Bisnis Layak Funding (BISLAF) to improve the readiness of small businesses to obtain financing from financial institutions. According to Loto, the strengthening of these various financing schemes is expected to increase MSMEs’ access to formal financing while simultaneously enlarging the contribution of MSME credit to total national bank lending.