OJK: Microloans with 5% Interest Rate Must Remain Sustainable

The Indonesian Financial Services Authority (OJK) believes that the microloan program with a maximum interest rate of 5%, proposed by President Prabowo Subianto, can be a positive step to expand access to finance for the community, especially low-income groups and those previously unbanked.

In his speech during the International Workers’ Day celebration, President Prabowo stated that he had asked state-owned banks to provide a microloan program with a maximum interest rate of 5% and a one-year tenor.

The policy is considered part of an effort to encourage community economic activity through more affordable financing access.

“The Microloan Program initiated by the Government is considered very good, it can be utilized by banks as a sustainable business opportunity so that the community, especially low-income people and those previously unbanked, can continuously benefit from it,” said Dian in a written response to the Monthly Board of Commissioners Meeting (RDKB) of the OJK, Sunday (17/5/2026).

According to her, the program is not only seen as a mere financing assistance policy but also as a long-term business opportunity for the banking industry if managed carefully and sustainably.

Dian emphasized the importance of strengthening governance and risk management by banks in implementing the program.

The statement indicates that the OJK sees the success of the microloan program depending not only on low interest rates but also on the bank’s ability to maintain the quality of financing and their business resilience.

The low-interest loan program is also considered to be able to open up wider access to finance for people who have not yet been reached by formal financial services. The unbanked group is one of the main targets in this program.

In the midst of encouraging the distribution of cheap credit, one of the main concerns is the potential increase in non-performing loans (NPL). The low-interest loan program targeting communities that were previously not reachable by banking services is considered to have its own risks to the quality of bank assets. To anticipate this risk, the OJK asked banks to strengthen internal supervision and conduct stress tests periodically.